GOP Tax Policy: An Elitist Plan For A Working Class America
Congress is working on a tax reform bill that is shaping up to be a giant tax cut for corporations and wealthy individuals. If passed by their Christmas deadline, it will send shock waves through the middle class.
Republicans have been salivating about tax reform for years, making it the centerpiece of their platform and promoting it as a cost saving for the middle class. Now that they control all three branches of government, they see a pathway for passage.
The bill calls for a $1 trillion net tax cut for corporations. Republicans have historically favored a reduction in corporate tax rates. Tax cuts are touted as a vehicle to strengthen the economy and grow jobs, which couldn’t be further from the truth.
Conservative icon Ronald Reagan was a proponent of supply-side economics aka Reaganomics. A macroeconomic theory, which argues that tax breaks and deregulation spur an increase in the supply of goods and services at lower prices, driving employment. Democrats argued that Reaganomics amounted to tax cuts for the rich at the expense of investments that enrich everyone, like schools and infrastructure, branding the policies as trickle-down economics—a windfall for corporations and wealthy people that, “trickles down” to everyone else. It’s an argument that has been fought since Ferris Bueller took a day off and Republicans aren’t winning.
During the Bush era, the economy saw an average yearly job growth of 160,125 compared to 1,323,571 under Obama. The unemployment rate skyrocketed to 7.6 percent, which Instead to 4.7 percent under Obama. Trickle-down was an epic fail under President Bush—it drove up the deficit and didn’t deliver on an economic stimulus.
The Republican argument that a corporate tax cut would trigger an increase in investment and wages was dispelled by the CEOs in attendance at last week’s Wall Street Journal CEO Council. The moderator asked, “how many would increase their business investment if the tax bill became law?” only a handful of CEOs raised their hands. The informal poll is more evidence that corporations don’t need tax cuts to create jobs when they are making record profits. If past behavior is a guide, they will use the savings to buy back shares, pay out executive bonuses and distribute dividends to investors
The majority of the bill is dedicated to corporate tax reform. However, the law also addresses the individual tax rate. Those making $1 million or more would see an average tax saving of $57,400, while 13.8 million households making less than $200,000 would see a tax increase in 2019 and 21.4 million would have higher taxes in 2025. The wealthy are the only winners.
The proposed tax reform bill is estimated to cost the government $1.5 trillion in revenue over a decade. To offset some of the cost, congressional Republicans plan to get rid of deductions for things like healthcare and student loans. The Senate snuck a last-minute provision into the bill to repeal the individual mandate in the Affordable Care Act, which would free up about $338 million in the next decade. If enacted, approximately 13 million people will lose health coverage, and premiums will rise. Republicans are celebrating at the prospect of passing a tax reform package that will leave millions of Americans uninsured so they can fund a tax cut for multi-billion dollar corporations and people who are so wealthy their grandkids won’t need to work.
We need tax reform. The code often favors the rich and leaves the middle class and poor holding the bag. For years, Republicans have run on the platform that their tax reform policies will benefit everyone.
Nothing was more telling than when Sen. Lindsey Graham was asked what happens if they fail to pass tax reform. Graham responded by saying, “financial contributions will stop.” This bill is not about getting the best deal for all Americans. Rather, it’s about getting a tax cut for the wealthiest Americans, so that Republican campaign coffers will continue to be filled.
The Republican Tax Reform Policy is an elitist plan for a blue-collar base. The best way to fight back against this devastating tax policy is to make your voice heard. Call your senator to demand they vote no; it’s not too late to stop the bill. Be the change you want to see in the world.
You can find your Senator’s contact info here: Senate website.