Early Dec. 2, under the cover of darkness, the Republican-led Senate passed—strictly along party lines—a tax overhaul bill that could represent the greatest transfer of wealth in our history from working people and the poor to the nation’s biggest corporations and wealthiest families. This action followed by two weeks the House version of the bill, which also did not receive a single Democratic vote. At the heart of both versions is a cut in the corporate tax rate from 35 percent to 20 percent and a total cut of $1.5 trillion. The chambers will have to reconcile the two versions before sending a final bill to the White House for the president’s signature.
The president is pushing congressional leaders to get the final bill to his desk before Christmas so he can sign the measure as his “gift” to the American people. But “stab in the back” might be a more appropriate term than gift.
“The Biggest Tax Scam in History,” wrote Paul Krugman, a New York Times columnist and Nobel Prize winning economist. Elected officials throughout the New York metropolitan region have blasted the measures. Gov. Andrew Cuomo called it an attack on New York and Mayor Bill de Blasio called the bills “inequality on steroids.”
Some in the GOP have argued the long-discredited theory that the resulting increase in corporate profits will “trickle down” to working people. The $1.5 trillion tax cut will not pay for itself by energizing the economy, the nonpartisan Joint Committee on Taxation has concluded. In November, 37 of 38 prominent economists surveyed by the University of Chicago agreed that the tax cut would not substantially lift the economy.
Rather, it would balloon the deficit, rain billions on corporations and the wealthy and actually increase taxes on most workers and the poor, greatly increasing the economic inequality candidate Donald Trump promised to address. In the first few years of the bills, middle-income Americans will see a modest reduction in taxes, but the cuts on low- and middle-income people sunset in 2015, whereas the cuts for corporations and the wealthy continue.
Residents of high-tax states such as New York and New Jersey are hit especially hard because the bills will end deductions for state and local income taxes, and the Senate bill lowers deductions for property taxes and mortgage interest.
Besides targeting states such as New York and New Jersey, the bill also takes aim at teachers and students by taxing endowments at private institutions and graduate tuition benefits. The House version of the bill shamelessly eliminates the $250 deduction teachers claim to offset their out-of-pocket spending for school supplies.
Incredibly, the Senate version of the bill amounts to a back-door repeal of the Affordable Care Act’s individual mandate. That will leave another 13 million
people without insurance over the next 10 years. But we will all be affected, because premiums for the insured would rise at least 10 percent.
But today’s Republican leaders—who have moved far to the right of Republicans our Union worked closely with in the past—will not stop at health care. Their goal is to undo both the New Deal reforms of the 1930s and Great Society advances of the 1960s.