The GOP’s Christmas Gift to the Billionaires

We hear a lot of talk about the GOP Tax “Reform.” Talk is cheap, though. Let’s take a look at the facts on the ground.

According to the politically neutral Tax Policy Center’s analysis, the top 1% of earners would receive about 80% of the tax benefit. That’s pretty grim and leads me to ask: who is financially struggling in our country? Is it the 1%? 

Will they really notice this additional Christmas gift under their sky-spanning Christmas tree? When you live in unimaginable opulence, does an extra percentage of money really make itself felt? Somehow, I think not. A responsible government should help those in need or lift up everybody, not favor the already obscenely rich who can take care of themselves and have no financial hardship.

The Tax Policy Center found some other worrisome issues with the GOP Tax “Reform” (which I consider to be more aptly named a GOP Tax Scam). It turns out that it contains some attempts at simplification, at least some of which are in theory laudable. For instance, it gets rid of the personal exemption and some itemized deductions while raising the standard deduction. Done right, this could level the playing field somewhat for those of us who don’t live at the top of our economic pyramid, since the growing mass of have-nots among us typically can’t claim any exemptions or deductions. For example, the most commonly accessible deduction (besides dependents) – namely mortgage payments – you can’t deduct when you are so poor you must rent the roof over your head or are even homeless.

As a renter, you pay the mortgage for your landlord, but the landlord gets to deduct the mortgage from his taxes, not you. It’s a little insight into how rigged our system is, always shunting wealth and income from the have-nots to the haves. I certainly don’t have time to read through the endless pages of this tax plan myself (after all, I don’t get a salary for my research and writing), so I can’t assure you that any of these simplifications will really remove some loopholes for the rich. Since it is a Republican tax plan, I am inclined to doubt it though, since it would mean a reversal of the course they have held for generations.

What this tax rearrangement will definitely do, however, is that in 2018 all income groups will see their average tax rates fall (although by only very little for the non-rich), but some taxpayers in each group will nevertheless face tax increases because of dropped deductions and the eliminated personal exemption (which multiplies by the number of household members and thereby has been helpful to families with numerous children whereas the standard deduction (which you can only claim when you won’t claim itemized deductions) doesn’t take household members into account). So, it’s a bit of a gamble for everyone — except the rich, of course, who get by far the biggest reduction in tax rate and for whom the personal exemptions have always been only a drop in the bucket anyway, and whose itemized deductions always open giant loopholes that no standard deduction can compete with. Besides, so many of them avoid taxes completely on most of their income via tax havens against which their puppets in Congress never do anything, preferring instead to go after honest expatriate workers in order to pretend that they are doing something. (sort of like the police called to a bank robbery letting the robbers get away to instead arrest a local beggar for loitering)

Since the actual numbers haven’t been fixed yet, the degree of the gamble is still unclear. Another thing worth mentioning is that there may actually be no simplification after all since, according to John Friedman, the plan is so full of provisions that need to disappear or fade that things will actually become more complex, at least in the sense of changing from year to year.

And then there is this: The introduction of a “chained CPI” will bring back “tax bracket creep,” a phenomenon where inflation pushes you into a higher tax bracket, even if you aren’t earning a higher actual income in terms of purchasing power.

What also worries me in this connection is that the GOP tax plan intends to collapse the seven individual income tax rates – which range from 10 percent to 39.6 percent – to just three: 12, 25 and 35 percent. I don’t know if you have ever jumped into a higher tax bracket by some trifling rise in your income and been hit with a huge tax increase because of it. It did happen to me. All my extra income from nightly extra work as a tutor went to the tax agencies that year. Gee, thanks!

Personally, in a real reform, I’d prefer that tax brackets were replaced by a mathematical formula that creates a smooth curve so that every extra dollar you earn actually raises your after-tax income, not like now where that one dollar that puts you into the next tax bracket can cost you thousands in taxes. A really stupid way to calculate taxes, if you ask me. Now, imagine being a low income earner whose single extra dollar of income raises your tax rate from 12% to 25%, more than doubling it!

This plan is beginning to look like a really chaotic mess, tossed and jumbled together with very little concern over how it will affect non-rich people, all done in order to deliver a huge tax gift to the rich inserted into the tax bill like a file baked into a jailbird’s cake.

And the biggest part of that gift to the rich is the deplorable estate tax repeal which will be an unbelievably huge present exclusive to the 4000-some richest families in our country, turning them into a completely uninhibited money aristocracy that can then pass a full 100% of its wealth and power down their dynastic bloodlines with not even the current 40% correction on the excess over the always untouched first $5-11 million. Considering that this may mean something like a $1 billion gift to the Trump family, the specter of a conflict of interest raises its ugly head. I don’t often agree with Elizabeth Warren, but these words of hers ring true: “The GOP tax scam that Congress just passed is government for sale. It’s a gigantic payoff to the wealthy campaign contributors who have funded Republican campaigns for years. And it’s a slap in the face to the working people…”

Putting aside the awful monster of the estate tax repeal since it merits its own article (probably coming here tomorrow), there are other worms you find when opening the can of this tax “reform” — things which, in addition to the already unwholesome huge tax gift to the rich, classify this “reform” as a scam by the Republican Party doing evil under the guise of good. Here they are:

According to the National Committee to Preserve Social Security and Medicare (NCPSSM), the GOP tax bill will:

  1. Trigger an automatic $25 billion cut to Medicare!!!
  2. Add $1.5 trillion to the federal deficit thus laying the groundwork for additional deep cuts to Social Security, Medicare, and Medicaid.
  3. Set a dangerous precedent that could soon lower Cost-of-Living Adjustments (COLAs) for Social Security.
  4. Repeal the Affordable Care Act mandate without any replacement, so that this will raise premiums for older adults (age 50-64) by an average of $1,500 in 2019.

To sum it up, we are looking at a corrupt tax plan designed to take from the poor to give to the rich, at the same time creating chaos and many tragedies among the non-rich, and that under a president who in his campaign claimed to be anti-establishment. Just like the repeal of Net Neutrality, which the corporate stooges in our corporate-corrupted government pulled off despite a vast public outcry and opposition, this drives home the point that we need a radical change in our country. Running back and forth as voters between the establishment operatives in the Republican Party and the establishment operatives in the “Democratic” Party is not going to stop our decline into a feudal third world nation that both political parties have been presiding over for the last 30-some years.

Here is a clip where Mark Blyth and John Friedman Talk about the GOP Tax Bill:

(Note: if the video linked above gets deleted, you may search the Internet for the title: “Mark Blyth and John Friedman Talk Tax Reform”)


Dirk Droll is the Publisher and Senior Editor of Beanstock’s World.

 

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About Dirk Droll 4 Articles
Dirk Droll has had many careers and lived in many places across the globe, giving him a lot of uncommon insights which he likes to share. He is the publisher, editor, and senior political writer of Beanstock's World and generously hands out the advice that, after leaving the sinking ship, there is still the ocean to contend with. Nowadays he specializes in system-critical and visionary politics, including its economic aspects.

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