Saturday, December 2, 2017

Editorial: GOP Owners Seek Payback

While corporate media focused on whether Al Franken’s wet kiss and mock lechery of a Playboy model/radio host during a 2006 USO tour of the Mideast before he was a senator, for which Franken has apologized, was the moral equivalent of Roy Moore’s past as an accused child molester and seducer of teenagers when he was an assistant district attorney in Gadsden, Ala., Republicans in Congress were proceeding with plans to pass a tax bill that cuts Medicare and Medicaid to pay for tax cuts for billionaires and corporations.

Republicans claimed, under their tax overhaul, American families, on average, would see their taxes cut by $1,300 in 2019, but the middle one-fifth of earners — earning $50,000 to $87,000 a year — would get a tax cut of $850, on average. People in the top 1% of incomes, who make more than $750,000 a year, would see a cut of $34,130, on average.

But the tax bill also repeals the individual mandate to buy insurance, which frees up more than $300 billion in federal funds over the next decade for tax cuts but results in 13 million fewer people having insurance, and higher insurance premiums for others, according to projections by the Congressional Budget Office.

The tax bill is expected to add $1.4 trillion to the national debt, which would trigger automatic spending cuts to Medicare ($25 billion the first year), student loans, military pensions, agricultural subsidies and supports, Customs and Border Patrol and other programs totaling $150 billion per year under the “Pay As You Go” rule. The last time Medicare was cut like this, in 2013, Sarah Kliff noted at, patients lost access to critical services such as chemotherapy treatment.

The Medicare cuts could be waived by Congress, but Republicans, on near-party-line votes, in October approved a budget that cuts $473 billion from Medicare and $1 trillion from Medicaid over the next decade to shake loose money for the tax cuts.

“This tax bill deserves a broader name. Its policies will cause millions of vulnerable Americans to lose coverage, disrupt care for the elderly, and potentially change the health care system in other ways we can’t fully predict,” Kliff wrote. “… The tax bill could, for some seniors, become a bill that sharply limits their access to health care.”

The CBO examined how the changes in federal spending would affect different income groups and found the groups that will be hit hardest are — surprise! — the working poor. According to the estimates, anyone making less than $30,000 a year would feel the pinch starting in 2019. By 2021, families earning $40,000 or less a year would be paying more in taxes and/or receiving less in services, creating a net savings for the federal government.

By 2025, individual tax cuts would be phased out, so benefits would be substantially less for the middle class. The average tax cut for all families then would be just $300, and 50.3% of American households would see their taxes increase by this point. Those in the middle quintile of earners would see a tax cut of just $50, on average, and 65.6% of these people would see their taxes go up while their government services are reduced and their health insurance costs likely would be shooting up by 10% or more annually. People in the top 1% of income earners, however, would still get a tax cut of $32,510, on average, and would receive 61.8% of the total tax benefits from the plan. After the tax breaks for the lower income groups expire in 2025, the corporate tax rate would remain at 20%, down from the current 35%.

“The whole purpose of this tax increase is to make it possible for Senate Republicans to pass a tax cut that overwhelmingly benefits the very wealthiest taxpayers — on party lines, without any Democrats,” Brad Sargent noted at the Washington Post. “The whole point of zeroing out the tax cuts for lower-income groups, resulting in a tax hike for so many people [after 2025], is to fund the continued corporate tax cuts, so they don’t add to the deficit in the long run, allowing Republicans to pass the bill via a simple majority vote.”

Bruce Bartlett, a former domestic policy adviser to Ronald Reagan, noted in the Washington Post that “the stealth goal of the GOP tax cuts is to start down the path toward gutting the New Deal and the Great Society — and if tax cuts pass, they might get away with it.”
The Joint Committee on Taxation estimated that both the Senate and House bills would reduce federal revenue by $1.4 trillion. That roughly matched the CBO’s findings.

Trump and Republicans claim the tax cuts will stimulate economic growth to make up for the tax cuts, but that is a fantasy. Unemployment already is down to 4.1%, which is considered full employment. Republicans say cutting taxes will force wages up, but “supply-side” economics hasn’t worked that way in the past.

Bartlett noted that wages fell steadily after the corporate tax rate was cut to 34% from 46% in 1986 under Reagan. Wages also fell in Britain after it cut corporate tax rates; tax savings primarily go to corporate executives and shareholders, he noted.

A better way to get wages up would be to keep the tax rates where they are and use the revenue to bring the nation’s infrastructure up to standards. Any tax cuts should be targeted at lower-income workers, who would put the money back into the economy, rather than putting the windfall into CDs or hedge funds, as the wealthy would do.

A supply-side tax plan was disastrous to the Kansas economy after Gov. Sam Brownback (R) convinced legislators in 2012 to slash income and business taxes to spur investment and economic growth. Instead, state revenues went into a free-fall, which forced the state to slash university budgets and cancel highway projects and required the state to borrow $1 billion to shore up the state’s public pension fund.

But the Grand Oligarch Party is all about the triumph of hope over experience, and while moderate Republicans joined with Democrats in the Kansas Legislature to pass a $1.2 billion tax increase over Brownback’s veto this past year, all five of Kansas’ US House members and both of its US senators have expressed support for Trump’s plan.

A survey of 42 academic economists by the University of Chicago’s Booth School of Business found only one economist agreeing with the Republican claim that “US GDP will be substantially higher a decade from now” than under the current baseline. In fact, 52% disagreed or strongly disagreed that the bill would lead to significant economic growth, and 36% were uncertain.

One of the selling points is that the bill would reduce the tax rate on corporations to 20%, but that rate would be for “C corporations,” the larger business entities. For small business owners in sole proprietorships, partnerships, LLCs and “S corporations,” which generally report “pass-through income,” the tax break would be limited to the first 30% of income, with at least 70% of the business owner’s income continuing to be taxed at the highest rate. And many independent contractors, such as truck drivers, would have to incorporate to continue to deduct business expenses.

Both versions would reduce deductibility of state and local taxes. The Senate bill would end all state and local tax write-offs, and the House bill would repeal deductions of state and local income taxes while preserving the deduction for property taxes.

The Senate narrowly passed this monstrosity of a tax bill 51-49 just before 2 a.m. Saturday, Dec. 2. The text was released to senators late Friday night, shortly before the final vote, but the Republican leaders refused to give senators or the public time to read the bill. Sen. Claire McCaskill (D-Mo.) said she got the amendments not from senators, but from a lobbyist, implying that lobbyists saw the bill before Democratic senators. Sen. Bob Corker (R-Tenn.) was the only Republican to vote against the tax scam.

The only reason the bill is being rushed into law is the billionaires who fund Republican politicians are demanding a payback on their investment and they’ve told Republican members of Congress if they don’t pass the tax cuts the political contributions will dry up. The bill will go to a conference committee, where House and Senate negotiatos will work out the differences in the bill, unless the House agrees to the Senate amendments, so lay into your House member Mondaypo: call them via the Capitol switchboard at 202-224-3121. Call your senators at the same number.

Monied interests too often override public interest to enact bad legislation. Tell your Representative and Senators you aren’t fooled by this tax break for the wealthy. In any case, We the People must reject the US Supreme Court’s 2010 decision in Citizens United, which made it legal for corporations to own legislators. Promote an amendment to the Constitution that firmly establishes that money is not speech and only human beings, not corporations, are persons entitled to constitutional rights. To help restore democracy, see But go there before Dec. 14, when the Federal Communications Commission plans to repeal net neutrality and leave you at the mercy of your corporate internet service provider. — JMC

(Editor's Note: This was updated from the print edition.)

From The Progressive Populist, December 15, 2017

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Selections from the December 15, 2017 issue

COVER/Steven Rosenfeld
Watch out for the next big attack on our voting systems

GOP owners seek payback


We were there

RURAL ROUTES/Margot McMillen
Step out of that caootprint

What does the internet look like if net becomes less neutral?
Open internet one of few things standing between us and Trump’s authoritarian rule;
Corporate news largely ignored FCC plan to kill net neutrality;
War over direction of bank watchdog;
Trump disrupts Navajo code talker reception with ‘Pocahontas’ slur;
Trump plays golf three times more than Obama;
Solar and wind energy now cheaper than coal and nukes;
No one wants KXL pipeline, but Nebraska approves it anyway;
Coal baron convicted in mine disaster mulls Senate run;
Comcast hints at plan for paid fast lanes after net neutrality repeal

Change is due

Washington’s war on poor grad students

Rural race to the bottom

Republicans in Congress think you’re an idiot

Your basic, average, ordinary, garden-variety cult

The true cost of inequality

HEALTH CARE/Joan Retsinas
Newspeak in Trumplandia: Block grants

Fish heads and chicken feet in your future?

This tax plan is going to cost a lot more than advertised

Republican death obsession

Origins of an invulnerable base

White-on-white crime

Trump’s Asia visit: behind red carpet reception

Stop pretending estate tax has anything to do with family farmers

Simon still rhymin’ after all these years

SATIRE/Rosie Sorenson
The new, improved Sophia (not Loren)

MOVIES/Ed Rampell
Thanks don’t cure PTSD

Cubans start small businesses, but US hurts them 

and more ...