Republican leaders in Congress finally unveiled their tax plan earlier this month.
Boy howdy, did they deliver.
Effects of the proposal were still shaking out on Thursday, but one thing is clear: The wealthiest Americans, including Donald Trump, stand to benefit massively from this proposal.
The bill eliminates the estate tax (which affects only the richest of the rich in the United States) and the alternative minimum tax (which is designed to make sure rich people don’t take advantage of so many loopholes that they don’t pay any income tax at all).
The bill would also slash the corporate income tax rate from 35 percent to 20 percent. The argument is that, by eliminating tax breaks and loopholes that businesses have used for years to keep from paying anywhere near 35 percent, not that much revenue would be lost.
But, as The Washington Post described it, “an army of lobbyists” is about to “lean on Congress in a bid to protect their preferred deductions.” If you think Congress will stand firm against that, we have several lovely bridges we’d like to sell you.
Republicans are hoping that, if they give the middle-class a tiny break — or muddy the waters enough that it’s not clear if they’re getting a break or not — then most people will be OK with the plan, and not care that it’s a vast giveaway to the rich.
It’s not immediately clear how the middle-class would be affected, but some changes are spelled out.
• Taxpayers would no longer be able to deduct the money they pay on state taxes from their federal income tax bill.
• Although the standard deduction for income tax filers would nearly double (from $12,700 to $24,000), the personal exemption would be eliminated. That tradeoff would hurt large families, although the child tax credit would be increased by a few hundred dollars.
• Medical expenses could no longer be deducted from federal income taxes, nor could property or casualty insurance losses.
And the kicker: This bill would add an estimated $1.5 trillion, to the national deficit. Remember when Republicans cared about adding to the deficit? Sure you do. It was when there was a Democrat in the White House.
GOP partisans say that money will be made up by a surge in economic growth triggered by the tax cuts. This is the same trickle-down, voodoo economics that Republicans have been pitching for decades. There’s still no proof that it works. In all likelihood, Americans will be left to pay that bill down the road.
The United States could use some good tax reform. Simplification is actually a good goal. This bill is not good tax reform. It’s a gigantic giveaway to the Americans who could use it the least. When your Republican representatives vote for this plan, remember whose water they’re carrying.