The GOP’s Tax Hike
The non-partisan Tax Policy Center’s report on the Senate tax bill notes that “compared to current law, 9 percent of taxpayers would pay more in 2019, 12 percent in 2025, and 50 percent in 2027.” If a bill raises taxes on 50% of Americans it’s not a tax cut.
The reason that 50% of American see a tax increase under the Senate tax plan is that the plan isn’t for the middle class. It’s for corporations and the GOP’s most elite donors. The rest is window dressing and the bill as much as says so.
The Almighty Corporate Tax Cut
It’s right there in black and white. The staggering 15-point cut in the corporate tax rate proposed in the Senate plan is permanent and requires no future reauthorization from Congress. The individual cuts — the ones that benefit actual human persons and not corporate entities — all expire in 2025.
Congressional Republicans are hoping Americans will trade a temporary $27-per-paycheck for a permanent, multi-trillion dollar, corporate tax giveaway.
As White House Budget Director Mick Mulvaney says “one of the ways to game the system is to make things expire.” Mulvaney needs to game things because the Senate rules would allow Democrats to filibuster anything that adds more than $1.5 trillion to the deficit over the next decade.
A Flawed Rational
The White House and Congressional Republicans insist that the permanent corporate cuts are necessary so that “companies can plan long-term, which Republicans say will result in investments and grow the economy.” But economists scoff at the notion. A survey by the University of Chicago’s Booth School of Business asked 37 economists if the Trump tax cuts would pay for themselves. All of them said no.
In total, there is not one economist in the Chicago poll who believes that Trump’s cuts would pay for themselves
Not only will the cuts not pay for themselves, they tie the government’s hands for the future. When the Great Recession hit the government funded major bail-outs of banks and auto companies. It slashed interest rates, borrowed money, spun up stimulus programs, and generally tried to kick-start the economy. This wasn’t just President Obama either; the effort to use debt and deficit to get the economy going again began under George W. Bush and contiunued under Obama. It was bipartisan
But every dollar the government borrows when unemployment is low, the stock market is high, and GDP is climbing is a dollar it can’t borrow or will pay more to borrow when economic catastrophe strikes. That’s why Desmond Lachman of the American Enterprise institute says that “it would seem to be singularly bad policy to add to the budget deficit now during the good times.”
Tell Congress what you think!
The Senate is pushing for a vote on its tax hike sometime after the Thanksgiving holiday. Text RESIST to 50409 to tell your representatives or Senators what you think about this or any other issue before Congress or use Facebook messenger to do the same thing by clicking here.
You can also text TAXES instead to see the immediate, estimated impact on your tax bill based on the Trump framework.
More On Taxes
Want to learn more about the Trump’s tax cut and how it’ll affect you? We’ve got you covered.