Sunday, December 17, 2017

Tax "Reform": A Republicans Festival of Corruption

Marco Rubio has reportedly been bought off so that he will vote for a bill that the Republican Party and congressional Republicans refer to as "tax reform" but which in reality is a budget busting give away to the extremely wealthy.  On the positive side - although not for the reason behind it - John McCain has left Washington, D.C., and will not be on the scene to vote for the GOP's poisonous tax bill.  In the short term some average Americans will be thrown a few scraps - one calculation indicated that the husband and I (who combined earn far more than many Americans) will allegedly receive a whopping 1.3% reduction in our federal tax bill. Those who make less will receive even less and any short term benefit will phase out.   For the very wealthy and large, cash rich corporations, the give away is permanent.  How anyone can claim that this bill - which will add far more than a $ trillion to the federal debt - is good for working Americans is mind numbing.  A column in the Washington Post looks at the the corruption and dishonesty behind the bill.  Here are excerpts:
The tax bill the GOP is trying to foist on the country is not only an unfair and deficit-bloating hodgepodge written on the fly. It is also deeply corrupt. Every Republican who votes for this bill will be joining a festival of venality.
Corruption is not a word to be used lightly, so let’s be disciplined by the Merriam-Webster dictionary’s definitions: “dishonest or illegal behavior especially by powerful people” and “inducement to wrong by improper or unlawful means.”
We can stipulate that the tax bill is not illegal. But it is a dishonest power and money grab by — and on behalf of — the already powerful. As for “inducements,” well, there are those long-term investments of tens of millions of dollars in campaign contributions (enabled by the collapse of all the guardrails around political money) from wealthy individuals and regiments of interest groups. They will have a merry holiday season if the bill passes as expected.
 This legislation proves that Washington is, indeed, the “swamp” that President Trump described during the campaign. But instead of draining it, he and his partisan allies have jumped right in. Actually, they have polluted it further.
A prime example of this subtle corruption is how the “compromise” bill deals with the radical scaling back of the deduction for state and local taxes. Gutting what is known as the SALT tax break sets back the common good because doing so penalizes states that (a) have progressive income taxes and (b) have somewhat larger governments and thus tend to invest more in education, infrastructure and programs for the needy. While California, New York and New Jersey would be hit hard, many other states would hurt, too.
But instead of restoring all or most of the lost deduction, Republicans offered a fig-leaf compromise. . . . .  The new version keeps the cap while allowing the deduction to be used for sales and income taxes as well.
For most taxpayers who use the existing deduction, this won’t solve their problem. One estimate from the Institute on Taxation and Economic Policy found that 1.89 million Californians would still see their taxes rise under the new provision, only a modest drop from the 2.36 million who would have had a tax increase under the version confined to property taxes. Any California representative who votes for this is voting against the interests of the state.
Ah, but the Republicans did want to respond to rich New Yorkers and Californians who were howling to their usual GOP benefactors, including Trump, about their lost SALT deductions.  So rather than offer general relief, the Republicans sliced the top income tax rate — for couples earning $600,000 or more — from the current 39.6 percent to 37 percent. 
The shamelessness of Treasury Secretary Steven Mnuchin’s description of the bill on CNN Sunday as “a very large tax cut for working families” is quite staggering. Consider that this confection of loopholes gives lawyers at big firms many paths to lower taxes but not much to the people who clean their offices. Soon, all Americans will demand the right to transform themselves into “pass-through” legal entities.
The bill’s champions claim that the big corporate tax cut will lead to massive new investment. But, as former New York City mayor Michael Bloomberg (no enemy of business) pointed out, corporations are already “sitting on a record amount of cash reserves: nearly $2.3 trillion.” Bloomberg added: “It’s pure fantasy to think that the tax bill will lead to significantly higher wages and growth.”
Needlessly rushing a massive special-interest tax bill through Congress is the antithesis of good government. This doesn’t seem to matter anymore, even to Republicans who built reputations as champions of moderation, openness and rectitude.

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