The Republican’s tax plan impoverishes Americans while enriching the one percent. It is unconsciounable that those who control 90 percent of America’s wealth are being given an even greater share of the pie. The bill that passed in both the House and the Senate is a windfall for the few but it has devastating implications for everyone else. It is a nightmare for wealth inequality and no better for planetary health. The tax scam, as some are calling it, favors oil and gas development while weakening the cleantech sector.
GOP steals from the poor and gives to the rich
The plan cuts the corporate tax rate from 35 percent to 20 percent. The tax breaks for middle class Americans will expire in 2026, while tax reductions for corporations are permanent. According to the latest Congressional Budget Office (CBO) assessment, the tax scam will add $1.4 trillion to the deficit over the next decade. The Committee for a Responsible Federal Budget says the debt-to-G.D.P. ratio will be approaching one hundred percent.
As reported by The Wahington Post’s Tom Kane one especially partisan provision would exempt Hillsdale College, a leading conservative college in Michigan, from an excise tax. Erik Prince, the brother of Education Secretary Betsy DeVos, is a Hillsdale graduate and the Trump administration includes at least four Hillsdale graduates.
The farce of trickle down economics
Both the House and the Senate pushed the bill through because Republicans knew they had to get something done. After months of failing to do anything on the legislative front, they passed what may be one of the most damaging bills in the country’s history. This bill relies on trickle down economics which has been exposed as a farce.
“Trickle-down economics says that the Reagan and Bush tax cuts should have helped people in all income levels. Instead, the opposite occurred. Income inequality worsened,” Kimberly Amadeo wrote. While everyone else suffered the top one percent saw their incomes triple. Trickle down economics does not work.
A 2015 International Monetary Fund (IMF) report, authored by five economists concludes that trickle down economics contributes to income inequality. “Income distribution matters for growth,” states the IMF report. “Specifically, if the income share of the top 20 percent increases, then GDP growth actually declined over the medium term, suggesting that the benefits do not trickle down.”
The Republican tax scam exacerbates growing inequality and this will result in deep cuts to Medicaid, Medicare, and Social Security. The repeal of the individual mandate in the Senate bill takes away health insurance from 13 million Americans and raises premiums by 10 percent.
This bill will kill 10,000 Americans every year by depriving people of adequate health coverage. This assessment comes from economist Larry Summers, who cited studies on what happens when people are uninsured. Summers is the former Treasury secretary under Bill Clinton and White House economic advisor under Barack Obama. Summers said the estimate is likely conservative and he added “this bill is very dangerous”. If you factor the repeal of the individual mandate, the tax scam will hurt anyone earning less than $75,000 per year.
With 41 million people currently living in poverty in the US income inequality is already a very serious problem. It is tragically ironic that the UN is currently investigating extreme poverty in the weathiest nation on Earth. This bill will make an already dire situatiion far worse.
Tax plan that harms the planet
The plan amounts to an assault on the green economy. The bill contains pro-fossil fuel and anti-renewables provisions. Although it faced opposition from 12 House Republicans a provision in the bill opens a 1.5 million-acre area of the Arctic National Wildlife Refuge (ANWR) to oil and gas drilling. There will also be tax benefits for oil and gas developers including intangible drilling deductions.
The House version of the plan kills up to $7,500 in federal tax credits for electric vehicles. It also eliminates tax credits for renewable energy development. The Senate proposal contains a provision that could hurt renewable investments.
Republicans looting the treasury
The GOP tax bill passed without either hearings or transparency causing the New Yorker’s John Cassidy to call the process a “travesty”. “It is brazen power politics carried out by a Republican Party desperate for a legislative victory,” Cassidy wrote. The Treasury Department’s inspector general is investigating whether the department hid its analysis of the bill.
“The Senate is declining to a new low of chicanery,” Chuck Schumer said. Bernie Sanders described the bill as “one of the great robberies in U.S. history because Republicans are looting the Treasury.”
Once again Republican lawmakers have shown themselves to be unfeeling and self-serving. In an interview with the Des Moines Register Republican Sen. Chuck Grassley said that the reason the bill favors the wealthy is because they don’t blow their money on “booze and women. Republican Sen. Orrin Hatch like most in his party refused to reauthorize the Children’s Health Insurance Program (CHIP). He explained, “we don’t have the money” to help sick children. Two days later he voted for the tax bill which gives billions to corporations and America’s wealthiest citizens.
Some corporations are not onboard
Corporations are well aware of the fact that the blatent inequality in this bill does not reflect well on them. As reported by Bloomberg’s Toluse Olorunnipa a number of corporations including Cisco, Pfizer, Coca-Cola and Amgen, have promised to give the returns from proposed tax cuts to shareholders.
This undercuts Republican claims that the revenues will quickly trickle down to workers. A recent White House paper suggests that corporate tax cut would boost wages. However, there is scant evidence to support this contention. At an event for The Wall Street Journal’s CEO Council very few Chief Executives indicated they were going to invest the windfall from corporate tax deductions in capital assets.
The two versions of the tax bill will need to be reconciled one of two ways. Either going to a conference committee which would produce a conference report or simply have the House vote on the version passed by the Senate.
This Christmas Americans may have a new tax plan and the best way to describe it is Scrooge on steroids.