Wednesday, November 29, 2017

Republican tax bill advances: The devil, the details, and the deep red sea

By this time, even if you’ve just scanned the headlines, you should not be surprised to learn that the Republican senators’ tax bill is a ginormous scam. David Leonhardt (in a NY Times op-ed) exposes The Four Big Tax Deceptions.

The independent evaluations of the Trump tax plan have been rough. They show a plan that deeply cuts taxes on the wealthy, causes the deficit to jump and does little to lift economic growth.

Yet the plan’s defenders continue to describe it as a “beautiful” thing (President Trump’s word) that would transform the economy and bestow gifts on ordinary Americans. How do they keep making these claims? I count four major tactics that they’re using … [Scriber: Following is a short, edited version.]

[1] Describe the benefits of a different tax plan — and make it sound as if they’re talking about this one. The Senate bill is radically different from this imaginary plan the [Republican] economists are praising. Instead of being revenue neutral — technical talk for a bill that neither grows nor shrinks the deficit — the Senate plan would increase the deficit by more than $1 trillion over its first decade.

[2] Talk about the plan’s middle-class tax cuts — and ignore the middle-class tax increases. The plan is a windfall for the wealthy, but it’s quite mixed for the middle class and poor. Some provisions raise taxes on the middle class and poor. Others cut taxes. Long term, most families would probably be worse off …

[3] Pretend that the future will never arrive. By the time the bill is fully implemented, it will be a net tax increase on every income group below $75,000 a year. It will also leave federal taxes virtually unchanged for families making between $75,000 and $100,000. For the wealthy, it’s still a tax cut. And all of these estimates understate the long-term damage to the middle class, because they ignore the cuts to education, transportation, Medicare, Medicaid and Social Security that will eventually be necessary to reduce the deficit.

[4] Rush, rush, rush. Perhaps the biggest giveaway about the plan is the way that its supporters are trying to push it through Congress as quickly as possible. They’re not holding hearings where experts can debate the content of the plan. They are not even waiting for a final analysis from Congress’s official tax arbiter, the Joint Committee on Taxation. They understand that facts and debate hurt their cause. They are hoping that partisan loyalty is strong enough to overcome substance.

But never mind all that. We are likely to see a party-line vote later this week after yesterday when the Republicans Clear Major Hurdle as Tax Bill Advances.

Senate Republicans took a significant step toward passing a sweeping tax overhaul on Tuesday, with a key panel giving its approval and several wavering senators indicating they would support the tax package, helping clear the way for full Senate consideration later this week.

Passage of the tax overhaul, which seemed uncertain on Monday, strengthened considerably on Tuesday after the Senate Budget Committee voted along party lines to advance the plan. A flurry of last-minute deal making helped garner the support of a few Republican lawmakers who had expressed concerns about the $1.5 trillion package, including its treatment of small businesses and its effect on the deficit.

The rapid turnaround underlines the pressure Republicans face to pass a tax cut and notch a significant legislative victory in their first year controlling both Congress and the White House. To help push the effort forward, President Trump went to Capitol Hill on Tuesday for a lunch meeting with Republican senators, where he made promises to some and admonished another.

The flipping senators include Ron Johnson, Bob Corker, and Susan Collins. All kinds of stuff got dangled in front of these floppers to get their votes. For example:

Ms. Collins said that the president was supportive of her wishes that $10,000 of property taxes be deductible under the Senate plan, a change that would be similar to the compromise that House Republicans made on the repeal of the state and local tax deduction. She also said that Mr. Trump was supportive of backing legislation to help stabilize health insurance markets under the Affordable Care Act, which she said would help mitigate the effects of ending the law’s requirement that most people have insurance, as the tax bill would do.

One of the truly heinous proposals is the tax increase automatically triggered should the Republican’s promise of a pot of gold in very middle class household not be realized. We already know that tax cuts don’t generate revenue, especially in this economically hot environment. So if that proposal is in the final tax bill, we can look forward to tax hikes.

Going forward, remember two things about the senators who are pushing the GOP’s tax bill. First, if those senators really truly believe what they are telling us, then in the face of ample contradictory economic facts, their beliefs disqualify them from elected office. Second, and alternatively, if they know those facts and are selling their tax bill anyway, they are lying to their constituents and deserve to be hounded out of office.

No comments:

Post a Comment