GOP Tax Bill Displays American Oligarchy
Around 2 a.m. Saturday morning, the U.S. Senate passed a bill 51–49 that would lower taxes on the richest Americans, while stripping healthcare from millions, opening up oil drilling in portions of the Arctic, and even raising taxes on some middle class households. It still has to be reconciled with a similar bill passed by the House of Representatives, so nothing is final yet, but all indications are that the Tax Cuts and Jobs Act is a reverse-Robin Hood scheme hatched by wealthy elites.
The role that lobbyists and rich donors played in creating this bill, and the benefits they will receive, are the biggest red flags.
According to Democratic Sen. Claire McCaskill, Democrats received last-minute changes to the bill Friday night, not from their Republican colleagues, but from outside lobbyists. This means that lobbyists saw the tax bill even before many members of Congress.
A shocking analysis from government watch-dog Public Citizen found that of the nearly 11,000 lobbyists working in D.C. this year, over 6,000 were involved in tax reform. Some of those lobbyists have direct ties to the Trump administration.
Apparently Republican donors have also been putting pressure on members of Congress to push through tax reform.
“My donors are basically saying, ‘Get it done or don’t ever call me again,’” New York Rep. Chris Collins said.
South Carolina Sen. Lindsey Graham expressed similar concerns, saying that if they are unsuccessful at tax reform, “financial contributions will stop.”
Clearly corporations wanted to make sure that they would benefit from this tax reform bill, and so far they have succeeded.
The Senate’s tax bill would lower the corporate tax rate from 35% to 20%. It was already revealed in the Paradise Papers that many large corporations hide money in offshore tax havens, so why are we lowering their taxes further?! This portion of the bill alone will cost $1.5 trillion, and the sole beneficiary will be corporations.
The bill also benefits the rich by raising the exemption for the estate tax. While it currently only impacts families passing on assets worth $5.5 million to their heirs(taxing them 40%), the Senate bill raises that threshold to $10 million and the House bill phases it out completely.
That is another $150 billion in benefits going solely to the top 1%. Overall, the Tax Policy Center estimated that top earners will receive about 80% of the bill’s benefits.
While most Americans would see a tax break under the plan, there are many who could actually get a tax increase. Since the bill is not final yet, it is not completely clear exactly who would face this consequence, but this handy New York Times interactive article shows some potential scenarios where this could happen.
Graduate students are among those who will be hit with an increase. Those receiving tuition waivers in exchange for teaching or research will now have to classify that as taxable income. That makes the already financially-difficult life of college students even harder.
People living in areas with higher state and local taxes may also see an increase. By limiting the amount of these taxes that can be deducted, residents in states like California, Connecticut and New York are more at risk of a tax hike.
The bill would also get rid of the individual healthcare mandate, which is estimated to cause 13 million Americans to lose healthcare over the next 10 years, while also raising rates for others. So basically people will be thrown off of healthcare, or see their rates rise, to pay for tax cuts to the rich.
A congressional analysis found that the tax reform bill would add $1.5 trillion to the federal deficit. To make up for this, the Congressional Budget Office said that billions of dollars in cuts to Medicare, student loans, and many other popular domestic programs every year may be necessary. While many Republicans are confident economic growth will be higher than projected, and that compromise can be found to avoid that scenario, it is extremely troubling news for Americans who rely on these programs.
Keep in mind, even the lower and middle class Americans who receive a tax cut will not benefit nearly as much as their wealthy counterparts. Average Americans may receive an additional few hundred dollars, maybe a few thousand if lucky, but the richest among us will earn millions, some (such as Donald Trump’s heirs) over a billion.
The top 1% of families already control nearly 40% of America’s wealth, compared to 23% owned by the bottom 90% (!) of families. By giving the top earners massive tax breaks, wealth inequality is guaranteed to become worse.
If this tax bill passes after reconciliation, it will reinforce what most Americans already realize: our country is no longer a democracy, but an oligarchy where the rich have more power than everybody else.