So we’re about to have a new tax code — one that will let corporations and top earners pay less and, eventually, make most individuals pay more. After exactly zero hearings and not even a score on the final bill from the congressional Joint Committee on Taxation, it now goes to President Donald Trump for his signature.
As the article points out, a cut in the corporate tax rate is utterly unnecessary, since economic growth is slow but steady and corporate profits are near all-time highs. There’s no need for the stimulative effect of a tax cut, much less one that blows a $1.5 trillion hole in the budget to do it. (As Republicans have repeatedly shown, they don’t care about deficits, except when they can cynically use them as an excuse to justify slashing the social safety net.)
The final bill isn’t quite as terrible as it could have been, since some of the worst ideas, like a massive tax increase on grad students, were dropped. But plenty of horrible provisions made it in, especially a provision for oil drilling in the Arctic National Wildlife Refuge and a repeal of the Obamacare individual mandate, which will wreak havoc on the health insurance market:
The Congressional Budget Office has predicted that as a result, 13 million fewer people will have insurance coverage by 2027, and premiums will go up by about 10% most years. (source)
As always, it’s the already-wealthy who will reap the most benefits. There was yet another cut to the estate tax. There was a change to the real-estate tax structure that appears specifically designed to benefit some of the senators who voted for it. And corporate CEOs have already said loud and clear that they’re going to spend their share of the proceeds on stock buybacks, further enriching their shareholders, rather than on hiring or investing:
Appearing Tuesday at The Wall Street Journal’s CEO Council conference in Washington, chief Trump administration economic advisor Gary Cohn watched with dismay when attendees were asked whether the reform bill would cause them to spend more on growth. Only a few responded.
“Why aren’t the other hands up?” Cohn asked, according to multiple press accounts. (source)
The effect of this will be to widen and entrench the division between the already wealthy and the struggling working class. It will make the U.S. look more like Mexico, Brazil or Russia – countries which have enormous wealth, but concentrated in the hands of a tiny number of multimillionaires and billionaires who live in gated compounds and commute by helicopter or armored limo, while millions live in squalid poverty.
If there’s any silver lining here, it’s that the GOP tax bill is hugely unpopular with the American public, who correctly perceive that it’s a giveaway to the super-wealthy at the expense of the middle class and the poor. But I have to ask: what did you expect?
When Americans vote for Republicans, they’re voting for increased inequality, for handouts to the rich, and for further destruction of the threadbare social safety net. Anyone who pays any attention to politics has no excuse not to know this. There’s a Lucy-pulling-away-the-football quality to those Americans who vote for Republicans time and again (especially in poor, dependent red states) and then are shocked and outraged when they do exactly what they’ve always done. It demonstrates the truth of the old quote about how the poor cling to imagining themselves not as exploited laborers, but as temporarily embarrassed millionaires.