UPDATE (11:45 am): Republicans in the House of Representatives have passed their version of The Tax Turducken. From the Washington Post:
The House passed its version of the Republican tax overhaul Thursday, notching a key win for President Trump and House Speaker Paul D. Ryan (R-Wis.). But obstacles remain in the Senate, which is refining its own version of the legislation amid objections from key GOP senators.
The bill passed with 227 votes in favor and 205 against. 13 Republicans voted against the bill. No Democrats voted for it.
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This shirt is more than middle class families can expect to receive from the GOP tax plan.
Congressional Republicans are working feverishly (or thereabouts) to pass a massive tax cut for the wealthy before the end of the year, and the House may hold a floor vote as soon as today. There is a lot of information floating around about the House and Senate tax proposals, and it’s a lot to digest (take this list of differences between the House and Senate versions of tax reform, for example). Thankfully, we’re here to, uh, reconstitute that information in a more accessible format.
Here’s what you need to know about the “tax reform” proposals currently getting greased up in Washington D.C.
Raising Taxes on the Middle Class
Let’s go right to the Washington Post with today’s big headline:
The tax bill Senate Republicans are championing would give large tax cuts to millionaires while raising taxes on American families earning $10,000 to $75,000 over the next decade, according to a report released Thursday by the Joint Committee on Taxation, Congress’ official nonpartisan analysts.
President Trump and Republican lawmakers have been heralding their bill as a win for hard-working Americans, but the JCT report casts doubt on that claim. Tax hikes for households earning $10,000 to $30,000 would start in 2021 and grow sharply from there. By the year 2027, Americans earning $30,000 to $75,000 a year would also be forced to pay more in taxes even though people earning over $100,000 continue to get substantial tax cuts. [Pols emphasis]
Gah!
Republicans are trying to fund massive tax cuts for the wealthy and corporations by increasing taxes for everyone else. This is not just some ginned-up liberal talking point. Much like Congressional Republican attempts at repealing Obamacare in the first half of the year, one analysis after another is showing that the GOP tax plan will harm infinitely more people than it could possibly help. The talking points write themselves for Democrats.
The Tax Turducken
Republicans are cramming as much crap as they can into one massive tax bill, including the big news Wednesday that the legislation will include a provision to roll back the individual mandate in Obamacare. This provision would effectively end healthcare coverage for some 13 million Americans.
Both the House and Senate versions of the legislation already include “Personhood” language, a bizarre attempt to establish some sort of legislative foothold for the anti-choice crowd that has absolutely nothing to do with, you know, taxes. The provisions that are related to taxes, meanwhile, can largely be characterized as handouts to specific lobbying groups.
Republican Cracks
Many Congressional Republicans been quiet for weeks on publicly endorsing or refuting aspects of the tax reform proposals. That changed on Wednesday, when Wisconsin Republican Sen. Ron Johnsonannounced his opposition to the current versions of both the House and Senate tax plans.
Republican Governors, meanwhile, are worried that an unartful Congressional tax reform plan will only increase the strength of a potential blue wave in 2018. Florida Republican Gov. Rick Scott, a potential U.S. Senate candidate, recently expressed his concern that Congress will fail to make any meaningful changes because they are putting all of their eggs in the same proverbial basket. As CNN reports:
Scott was also critical of how Congress is handling tax reform, saying lawmakers should “quit having a grand bargain” and “do what you can get done today.”
“These ideas that you’ve got to have this gigantic change never happens. These grand bargains never happen,” Scott said.
Tax Increases to Pay for Tax Cuts
The math doesn’t lie for Republicans: It’s not possible to make permanent tax cuts for corporations and rich people and regular Americans while not completely exploding the national debt, so Republicans will just worry about corporations and rich people for now.
Congress is not allowed to enact legislation that would add to the federal deficit after 10 years, so Republicans have crafted a way around this problem: They’ll just turn off most of the tax cuts for non-rich people in a few years. As Politico explains:
Senate Republicans are on the defensive after proposing to only offer temporary tax cuts to millions of Americans as part of a revised plan to overhaul the tax code.
While they want to make a host of business tax cuts permanent, they would make reductions in tax rates, expansions of the standard deduction and child tax credit, and other provisions expire after 2025.
As Sen. Lindsey Graham (R-South Carolina) told Politico about the individual tax cut provisions: “I’d like to make them permanent, but we’ll just come back at them again [later].”
In other words, middle class Americans can get bent while the GOP tax cut for the wealthy adds $1.5 TRILLION to the federal deficit in the next decade. Neat!
No Relief for You, Colorado
Check out some of these numbers from the Institute on Taxation and Economic Policy regarding how the Republican tax proposals will (not) benefit Coloradans:
♦ Roughly 18% of Colorado families, most of them middle-class families, will ultimately see their taxes increase as a result of the legislation.
♦ About 75% of the tax cuts will go to the top 20% of Coloradans (46% of the total will benefit just the wealthiest 1% of Coloradans).
♦ The number of households in Colorado that will benefit from repealing the estate tax is about 70. That’s 70 total – not a percentage.
♦ At least 235,000 Coloradans would lose health insurance coverage by 2025 if the GOP tax plan passes.
Americans Aren’t Buying What GOP Is Selling
Results from a new poll out Wednesday from Quinnipiac University follow the same trend as their predecessors in recent weeks. Voters now disapprove of the GOP tax plan by a greater than 2-to-1 margin:
American voters disapprove 52 – 25 percent of the Republican tax plan. Republican voters approve 60 – 15 percent, with 26 percent undecided. All other party, gender, education, age and racial groups disapprove. [Pols emphasis]
Perhaps most troubling for Congressional Republicans is the fact that Americans aren’t accepting the GOP narrative of middle class tax relief:
The wealthy would mainly benefit from this tax plan, 61 percent of American voters say, while 24 percent say the middle class will mainly benefit and 6 percent say low-income people would mainly benefit.
American voters say 59 – 33 percent that the Republican tax plan favors the rich at the expense of the middle class.
Only 16 percent of American voters say the Republican tax plan will reduce their taxes, while 35 percent of voters say it will increase their taxes and 36 percent say it won’t have much impact on their taxes.
Said Tim Malloy, assistant director of the Quinnipiac University Poll:
“The sentiment from voters: The GOP tax plan is a great idea, if you are rich. Otherwise, you’re out of luck.”
raising taxes on American families earning $10,000 to $75,000 over the next decade, according to a report released Thursday by the Joint Committee on Taxation, Congress’ official nonpartisan analysts.
Money to spend now … and leaving a growing deficit and even greater debt to some future population.
Budget deficit for FY
2017 $666 billion.
Initial "official" estimate of future deficits
2018 $440.16
2019 $525.90
2020 $487.95
2021 $455.80
2022 $441.66
to those numbers, we can now add the new military spending (up $70 billion next year) and, if the tax "reform" package actually passes, another $150 billion or so each year.
Remember the old days, when Republicans kept promising they would be fiscally prudent? You know, more than 12 months ago.
The GOP House is nuts (not really news). One can only hope at least 3 GOP Senators will again bring this kamikaze attack against American families to a halt.
Only need two more since Ron Johnson has already said no to both House and Senate bills. Paging the Last Stand Caucus members of McCain, Flake and Corker.
Flake might vote No. He's a deficit hawk and has nothing to lose. Same with McCain if he decides any part of it sucks – or decides they're foregoing regular order to jam yet another poor bill through, which they are.
If Republicans wanted to make pass-through entities more competitive with C-corps, they could simply create a mechanism by which they could create an account to hold money in trust for the business for a period of years. Instead they're writing a proposal that directly benefits real estate tycoons and others who use LLCs to maximize their own pocketbook while shielding themselves from risk. (It always seems to be about socializing losses while privatizing gains for some people…)
And Ryan had the votes for him to wiggle out of like the Healthcare bill. He must have really really wanted to go on record supporting this wealthfare bill.
Deficit-weasel Mike Coffman does a 180 to explain his "Yes" vote. This is from his website today:
Today, U.S. Representative Mike Coffman (R-CO) released the following statement upon House passage of H.R. 1, the ‘Tax Cuts and Jobs Act’:
"This is pro growth tax reform. I've always believed that simplifying our tax code and reducing the tax burden on hardworking families and businesses will promote job growth and higher wages in communities all across our country. The same CBO that projected a $1.5 trillion deficit over the next 10 years is also projecting that there will be $1 trillion in additional revenue for every .4% of economic growth. I'm amazed that the same loud voices that defended voting for $2.7 trillion in deficit spending to grow the size of government, in just the first two years of the Obama Administration, are now suddenly concerned about deficit spending when it comes to reducing the tax burdens on families and businesses in order to grow the economy."
———————————————————————————————-
And this is the comment I sent to Coffman several weeks ago.
Please oppose the Tax Cuts & Jobs Act
This act does not warrant increasing US debt by $1.5 trillion over the next decade. Please stand by your longstanding and oft-repeated principles of a balanced budget and reducing US debt. This act works in the opposite manner. You cannot have it both ways. We are not stupid. We expect you to apply your wisdom as former Colorado State Treasurer. Hypocrisy will be obvious if you choose to support this act. >From the Washington Post 11/3/17:The cut in corporate taxes will deplete the Treasury by nearly $847 billion over the next decade, according to the Joint Committee on Taxation. The elimination of the estate tax — which is paid only by the small portion of Americans with estates worth more than $5.49 million — and related measures will cost $172 billion. The creation of a 25 percent rate for people who pay corporate taxes through the individual code — a popular way for the wealthy to reduce their tax obligation — will cost $448 billion.
That is $1.47 TRILLION to the wealthiest Americans. Inequality will worsen. The premise that this $1.47 trillion bonus will lead to economic expansion and job growth is risky and questionable.Please do not foist this debt travesty on my 5 grandchildren and on our democracy.
Tapioca-brain Coffman shows his economic chops by ignoring that the stimulus bill (TARP) was a last gasp effort from the Bush Administration. He also doesn't seem to understand that bill and the additional stimulus bill (ARRA) prevented a new depression, and likely world-wide deeper recession.
Of all the myths and falsehoods that Republicans have spread about President Obama, the most pernicious and long-lasting is that the $832 billion stimulus package did not work. Since 2009, Republican lawmakers have inextricably linked the words “failed” and “stimulus,” and last week, five years after passage of the Recovery Act, they dusted off their old playbook again.
“The ‘stimulus’ has turned out to be a classic case of big promises and big spending with little results,” wrote Speaker John Boehner. “Five years and hundreds of billions of dollars later, millions of families are still asking, ‘where are the jobs?’ ”
The stimulus could have done more good had it been bigger and more carefully constructed. But put simply, it prevented a second recession that could have turned into a depression. It created or saved an average of 1.6 million jobs a year for four years. (There are the jobs, Mr. Boehner.) It raised the nation’s economic output by 2 to 3 percent from 2009 to 2011. It prevented a significant increase in poverty — without it, 5.3 million additional people would have become poor in 2010.
Deficit spending in a booming economy can lead to a wage-price spiral. I wouldn't say that our economy is in a recession, but I don't see many signs of wages going up.
Trickle up is more effective than trickle-down.
The poor have a 1.5 – 2 economic multiplier. The rich have a multiplier of 1. In other words: Give poor people more money they spend it, thereby boosting the economy; Give rich people more money, the put in the bank or move it off shore.
Yep — we're already at full employment, and Trump's effort to stop immigration, and deport productive workers as well, is just going to make it worse for companies needing workers. That might raise wages eventually, but as you say, inflation will soon follow to nullify any gains.
Giving more money to the "Capital Class" who are already sitting on vast amounts of cash sloshing around in their accounts will neither create more investment nor many jobs.
The tax disincentives targeting deductions widely needed by the middle class (children, medical expenses, college loans, etc.) will discourage investing in education and eat into whatever meager savings the working age families can scrounge together, limiting their earning power.
With no safety net (healthcare, retirement savings), the current and future generations will be working their entire lives, and if they fall into the economic trap of ill health and no savings, America could usher in a New Dickensian Age thanks to the backward thinking Republican policies.
This article puts the Republican strategy to cut taxes on the wealthy in a more focussed context. We're talking about class war, raising taxes on people who work for a living (makers) and lowering them on people who don't work (takers), specifically owners of real-estate, stock and heirs.
The crucial thing to realize is that this tax reform effort reflects more than the normal conservative allergic reaction to progressive taxation — going far beyond undoing the modest progressive grains achieved by Presidents Obama and Clinton. Three major changes stand out: These taxes are far more focused on owners than on workers, even by Republican standards. They take advantage of the ambiguity of what counts as income, weaponizing that vagueness to help their friends and hurt their enemies.
And after years of pushing for a safety net that works through the tax code, in order to keep more social democratic reforms at bay, Republicans now reveal their willingness to demolish even those modest protections. Their actions make clear that a welfare state based on tax credits and refunds, rather than universal commitments, is all too vulnerable.
November 16, 2017 11:45 AM UTC
23 Comments
Hooray! Tax relief for the American people is the #1 way to improve our lives. Put the money back in the pockets of the people who spend it best.
Democrats are just mad because if Republicans get things done, voters will appreciate it and keep electing Republicans! Too bad so sad….
Odd, I thought there were 325 million Americans. You seem to think there are only 3.25 million.
The people that spend it the best are the ones your party plans to raise taxes from.
Ummmmmm . . .
Hoofuckingray, huh, Flufferbuffer?
Including Roy Moore? You still won't speak out on the allegations by 8 women.
You also still need to weigh in on the November 7th elections that sent a number of your Republicans packing.
You do realize that the other chamber must approve a bill in identical form with the House bill?
Remember, Fluffy. The House has been able to pass repeal of A.C.A. but the Senate has been unwilling to go along with them.
So, you support this tax increase?
Money to spend now … and leaving a growing deficit and even greater debt to some future population.
Budget deficit for FY
2017 $666 billion.
Initial "official" estimate of future deficits
2018 $440.16
2019 $525.90
2020 $487.95
2021 $455.80
2022 $441.66
to those numbers, we can now add the new military spending (up $70 billion next year) and, if the tax "reform" package actually passes, another $150 billion or so each year.
Remember the old days, when Republicans kept promising they would be fiscally prudent? You know, more than 12 months ago.
The GOP House is nuts (not really news). One can only hope at least 3 GOP Senators will again bring this kamikaze attack against American families to a halt.
Only need two more since Ron Johnson has already said no to both House and Senate bills. Paging the Last Stand Caucus members of McCain, Flake and Corker.
Flake might vote No. He's a deficit hawk and has nothing to lose. Same with McCain if he decides any part of it sucks – or decides they're foregoing regular order to jam yet another poor bill through, which they are.
Collins might not go for it either. She can do arithmetic and doesn't like how it doesn't add up.
I can't believe that Gov. Rick "Medicare Rip-off" Scott is the rational one here…
If Republicans wanted to make pass-through entities more competitive with C-corps, they could simply create a mechanism by which they could create an account to hold money in trust for the business for a period of years. Instead they're writing a proposal that directly benefits real estate tycoons and others who use LLCs to maximize their own pocketbook while shielding themselves from risk. (It always seems to be about socializing losses while privatizing gains for some people…)
Stabbing Sen. Susan Collins' 2002 teacher tax credit in the gut probably didn't win them a convert in her…
She's also been critical of repealing the individual mandate which is in the Senate bill.
I see the Pride of Aurora voted "aye" on this.
And Ryan had the votes for him to wiggle out of like the Healthcare bill. He must have really really wanted to go on record supporting this wealthfare bill.
I saw “Aurora’s pride’s” recent tax-bill commercial last night . . .
. . . (can’t find it on YouTube, yet though)
Deficit-weasel Mike Coffman does a 180 to explain his "Yes" vote. This is from his website today:
Today, U.S. Representative Mike Coffman (R-CO) released the following statement upon House passage of H.R. 1, the ‘Tax Cuts and Jobs Act’:
"This is pro growth tax reform. I've always believed that simplifying our tax code and reducing the tax burden on hardworking families and businesses will promote job growth and higher wages in communities all across our country. The same CBO that projected a $1.5 trillion deficit over the next 10 years is also projecting that there will be $1 trillion in additional revenue for every .4% of economic growth. I'm amazed that the same loud voices that defended voting for $2.7 trillion in deficit spending to grow the size of government, in just the first two years of the Obama Administration, are now suddenly concerned about deficit spending when it comes to reducing the tax burdens on families and businesses in order to grow the economy."
———————————————————————————————-
And this is the comment I sent to Coffman several weeks ago.
Please oppose the Tax Cuts & Jobs Act
This act does not warrant increasing US debt by $1.5 trillion over the next decade. Please stand by your longstanding and oft-repeated principles of a balanced budget and reducing US debt. This act works in the opposite manner. You cannot have it both ways. We are not stupid. We expect you to apply your wisdom as former Colorado State Treasurer. Hypocrisy will be obvious if you choose to support this act. >From the Washington Post 11/3/17:The cut in corporate taxes will deplete the Treasury by nearly $847 billion over the next decade, according to the Joint Committee on Taxation. The elimination of the estate tax — which is paid only by the small portion of Americans with estates worth more than $5.49 million — and related measures will cost $172 billion. The creation of a 25 percent rate for people who pay corporate taxes through the individual code — a popular way for the wealthy to reduce their tax obligation — will cost $448 billion.
That is $1.47 TRILLION to the wealthiest Americans. Inequality will worsen. The premise that this $1.47 trillion bonus will lead to economic expansion and job growth is risky and questionable.Please do not foist this debt travesty on my 5 grandchildren and on our democracy.
Tapioca-brain Coffman shows his economic chops by ignoring that the stimulus bill (TARP) was a last gasp effort from the Bush Administration. He also doesn't seem to understand that bill and the additional stimulus bill (ARRA) prevented a new depression, and likely world-wide deeper recession.
Deficit spending in a recession is advised.
Deficit spending in a booming economy can lead to a wage-price spiral. I wouldn't say that our economy is in a recession, but I don't see many signs of wages going up.
Trickle up is more effective than trickle-down.
The poor have a 1.5 – 2 economic multiplier. The rich have a multiplier of 1. In other words: Give poor people more money they spend it, thereby boosting the economy; Give rich people more money, the put in the bank or move it off shore.
Yep — we're already at full employment, and Trump's effort to stop immigration, and deport productive workers as well, is just going to make it worse for companies needing workers. That might raise wages eventually, but as you say, inflation will soon follow to nullify any gains.
Giving more money to the "Capital Class" who are already sitting on vast amounts of cash sloshing around in their accounts will neither create more investment nor many jobs.
The tax disincentives targeting deductions widely needed by the middle class (children, medical expenses, college loans, etc.) will discourage investing in education and eat into whatever meager savings the working age families can scrounge together, limiting their earning power.
With no safety net (healthcare, retirement savings), the current and future generations will be working their entire lives, and if they fall into the economic trap of ill health and no savings, America could usher in a New Dickensian Age thanks to the backward thinking Republican policies.
Vox WOTD: "Republicans are weaponizing the tax code".
This article puts the Republican strategy to cut taxes on the wealthy in a more focussed context. We're talking about class war, raising taxes on people who work for a living (makers) and lowering them on people who don't work (takers), specifically owners of real-estate, stock and heirs.