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Tax benefits should bubble up, not trickle down
In reality, the GOP House and Senate bills deal far more with tax cuts than tax code reform. The tax landscape is being purposefully altered to favor the .01% of the wealthiest individuals and corporations. No independent analysis of the GOP tax plans agree with the faulty GOP's conclusions that their legislation will spur enough sustained (decade) economic growth to pay for the huge federal revenue shortfalls. The GOP tax schemes substantially reward the individual/corporate wealthy at the expense of the middle class and government revenue. There will also be increasing interest payments on the deficits that result from these GOP "revenue-negative" taxation schemes. In order to make up for the eventual revenue shortfalls, taxes will have to be raised and programs such as Medicare and Social Security fleeced. McConnell and Ryan are wishing and hoping that Democrats are in power when all the GOP 115th Congress negative-revenue/interest-payment shortfalls being engineered in 2017 come due in 2028.
BY KIMBERLY CLAUSING
11/27/17
Economic dissatisfaction fuels political polarization and populist policies. Indeed, many attributed the election of Trump to middle-class economic discontent, although there were clearly other factors at work in his election. What sort of tax policy would we expect from a populist movement? Presumably something that would help those harmed by economic stagnation and income inequality. Yet, when one looks at the actual details of the House and Senate tax bills, one sees that their true priorities are upside down. Claims of help for workers melt into nothing more than trickle-down economics. The House bill provides $1.5 trillion in deficit financed tax cuts. Of this, $600 billion go to pass-through businesses; 98 percent of these benefits accrue to those with incomes greater than $100,000. Another $150 billion goes the top one-fifth of 1 percent of households that would normally pay the estate tax. And corporate tax cuts total another $750 billion.
Before 1980, Growth Lifted all Boats. Since then, not so much.
When all the dust is settled, individuals without estates receive only 15 percent (about $215 billion) of the deficit-financed tax cuts in the House bill. Analysis by the Tax Policy Center shows the top 1 percent with a tax cut of over $60,000 by 2027, while the tax cut for the bottom four-fifths of the population averages only $315 in 2027. And this ignores the reality that deficits generate borrowing that must be repaid. Once that awkward fact is acknowledged, the middle class faces increasing tax burdens, all to give tax breaks to business owners and those at the very top of the income distribution. all of the individual tax cuts in the Senate bill sunset. By 2027, a majority (50.3 percent) of Americans face higher tax increases. While the tax cuts for the middle class expire, the corporate tax cuts are forever. That is a clear statement of priorities if there ever was one. What would a worker-friendly tax policy look like? It’s quite simple. Direct any tax cuts to workers. Worker prosperity will bubble up to companies and the economy as a whole. After decades of serious economic disruption, these tax bills move us in the wrong direction. And, they are more likely to harm than help American workers.
In reality, the GOP House and Senate bills deal far more with tax cuts than tax code reform. The tax landscape is being purposefully altered to favor the .01% of the wealthiest individuals and corporations. No independent analysis of the GOP tax plans agree with the faulty GOP's conclusions that their legislation will spur enough sustained (decade) economic growth to pay for the huge federal revenue shortfalls. The GOP tax schemes substantially reward the individual/corporate wealthy at the expense of the middle class and government revenue. There will also be increasing interest payments on the deficits that result from these GOP "revenue-negative" taxation schemes. In order to make up for the eventual revenue shortfalls, taxes will have to be raised and programs such as Medicare and Social Security fleeced. McConnell and Ryan are wishing and hoping that Democrats are in power when all the GOP 115th Congress negative-revenue/interest-payment shortfalls being engineered in 2017 come due in 2028.
