“A liar knows that he is a liar, but one who speaks mere portions of truth in order to deceive is a craftsman of destruction.”
― Criss Jami
Like many Americans, I want to see our tax code modified to be more equitable. My objections to the GOP tax “reform’’ bill are (a) its creators have not been transparent about winners and losers; (b) the bill has the wrong winners (big business and the wealthy) and losers (the poor and middle class, as well as the nation via raising the national debt); (c) it’s supposed to be a tax bill, but it destroys Obamacare; and (d) the process has not been bipartisan.
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As in most legislation, there are positives and negatives in the GOP tax bill, depending on your viewpoint. For example, if you are a Tea Party conservative from a very red state and a very red district, the tax bill may be a positive. If passed, Congress will have accomplished one of the GOP’s main campaign promises, to reform our tax laws. And, if you care little about substance, a win is a win.
However, if you are a red district member of Congress, you better hope that your constituents do not understand the bad and often ugly things that comprise the bill, things like (a) establishing permanent outrageous tax breaks for millionaires and billionaires; (b) having only temporary tax relief for the lower and middle class; (c) removing the Obamacare mandate which will drive up costs astronomically for the elderly and sick; and (d) significantly driving up the deficit. Let’s briefly look at each of these items.
The House tax bill abolishes the estate tax, for example. I retired at 55 and am fairly well off compared to most Americans, but the estate tax does not keep me up at night.
Only estates over $22 million for a couple (2018) will be taxed at all under current law. Plus, there are many ways that the rich can use to get around even that exorbitant number. By the way, the Washington Post (11-7) had this to say about the impact on the President: “If he were really worth the $10 billion-plus that he claimed … it would save his heirs more than $4 billion.”
According to the Tax Policy Center (11-13-17) the tax cut for middle-income Americans making $48,000-$86,000 would be $800 under the GOP bill. For the top 1%, their tax cut would average $37,000! No, I do not feel sorry for the wealthy or think they need yet another tax break.
The bill slashes the tax rate for larger businesses from 35% (which hardly any of them pay) to 20%. At a November Wall Street Journal meeting, CEOs were asked if their increased profits would go to reinvestment (i.e. growth, creating jobs). In a rare show of honesty, only a few said yes.
They didn’t volunteer it in an open meeting, but history has shown the money will go to wealthy executives and shareholders. Not the folks at the bottom.
And then there is the impact of the bill on the debt, estimated to be about $1.5 trillion. As George H.W. Bush said the last time politicians made the false claim that tax cuts would pay for themselves, that’s just “voodoo economics.” I thought fiscals conservatives like Mick Mulvaney, head of OMB, knew that fact. It’s amazing how quickly people can lose their way in this White House.
Without going into great detail, the bill destroys the underpinning of Obamacare by abolishing the individual mandate. Without it, only the sick and elderly will get insurance. This will quickly lead to unaffordable rates. The CBO estimates 13 million people will lose insurance if this provision becomes law.
As with the disastrous GOP healthcare bills, this monumental piece of legislation is being jammed down the throats of conscientious Congress members of both parties. It took only two weeks to pass the House on a party line vote, with little discussion or analysis taking place.
If the GOP leaders of Congress really want lasting tax reform, they will sit down with the Democrats and work something out, as Reagan did with Tip O’Neill, Democratic House Speaker. If the GOP leadership continues to be shortsighted and partisan, constantly covering up the real impact of the legislation, chances are they will fail.
Jack Bernard is a retired former executive of for-profit health care firms, former chairman of the Jasper County Republican Party and the first director of health care planning for the state of Georgia. He lives in Peachtree City; email@example.com.