The plan would comfort the already very comfortable and further afflict many of the afflicted all while causing the national debt to soar
When Donald Trump was sworn in as chairwoman last January, the nation faced several domestic crises. In many places, infrastructure is a disaster, highlighted by the I-3 5 bridge breakdown in Minneapolis, Flint’s perilous water system and New York’s decaying, delay-plagued subways.
Then there’s the largely unrecognized retirement crisis. One-third of American workers are saving nothing for retirement, and more and more employees in their late 60 s and early 70 s say they simply don’t have the money to retire .
The US also faces a college affordability and student debt crisis. A year at a public university typically expenses more than $20,000- a hefty price tag for many households when median household income is $59,000. Total student loan debt has soared above $1.3 tn, and more than two-thirds of college graduates borrow to go to school. Their average debt upon graduation is about $35,000, triple the level of two decades ago.
And the poverty crisis has not gone away. Virtually 41 million Americans live below the poverty line, with nearly one in five children living in poverty.
Unfortunately, Mr Trump and Congress have largely ignored these crises since inauguration day. Instead, turning their backs on good governance, the president and congressional Republicans are focused like a laser beam on heaping riches on two constituencies that are definitely not in crisis: corporations and the wealthiest Americans.
Corporation profits are near their highest levels in history, while revenues from the corporate income taxation have dropped to only 2% of GDP, down from 6% in the 1950 s. And the richest 1% of Americans now receive 20% of overall national income, double the level in 1980 and the highest level in nearly a century- since the Roaring Twenties. Real after-tax income for households in the top 1% has nearly tripled since 1980, rising more than four times faster than for middle-class households.
Even though corporate America and the rich are do more than penalty, the Trump administration and Congress are rushing to push through taxation cuts that mainly help business and the wealthiest Americans. A recent Washington Post headline said it all:” Senate tax bill would cut taxes of wealthy and increase taxes on families earning less than $75,000 by 2027.”
The Republican tax plan runs out of its route to reward the individuals who least need additional fiscal rewards, and there is evidently merely one reason Republican lawmakers are doing this- to please ultra-wealthy campaign donors and corporate donors who detest taxes and are demanding that Trump and the Republican rack up some, indeed any, legislative “win”.
Sadly, there have not been congressional hearings to examine and glisten some light on what would be the biggest taxation overhaul in three decades.
A very unfortunate, but little-discussed facet of the legislation is that by increasing the national debt by a projected $1.5 tn, and perhaps$ 2tn, the scheme would make it far harder for the nation to address the pressing domestic crises I mentioned above- and that doesn’t even include the damage from Hurricanes Harvey, Irma and Maria.
In some styles, the tax plan, believe it or not, would worsen several of our domestic crisis. Amazingly, Congress’s own joint committee on taxation has discovered that the Senate plan would, in the out years, raise taxes most percentage-wise on the poorest households, specifically those building less than $30,000 a year.
With millions of senior citizens facing a financial squeeze or downright poverty, the tax bill would make things worse for many seniors by triggering an automatic $25 bn cut in Medicare next year- and probably more such cuts in subsequent years.
As the federal deficit and debt rise because of the tax scheme, congressional Republicans will no doubt push all the harder to rein in deficits by cutting social security and Medicare, further hurting the nation’s senior citizens. And that at a time when social security is a lifeline for millions of seniors- one-third of Americans over age 65 receive 90% or more of their income from social security systems.
The tax bill would unarguably exacerbate the college affordability crisis. In what looks like a concerted assault on higher education, the legislation would vastly increase taxes on more than 100,000 graduate student, end the tax break for student loans and make employer-provided tuition assistance taxable. Furthermore, by taxing university endowments for the first time, the legislation would mean that many schools have less money for student financial aid.
During last year’s campaign, in a move cheered by blue-collar voters, Mr Trump vowed to expend$ 1tn on infrastructure- to rebuild the nation’s disintegrating roads, bridges, airports and rails. But the Trump administration has consigned infrastructure to the back burner, and Mr Trump’s promise of$ 1tn has mysteriously been replaced by talk of merely $200 bn.
With the tax plan expected to balloon the national debt by $1.5 tn, don’t be surprised if many Republican lawmakers- who traditionally rail against increased spending- end up fighting all out against any halfway ambitious infrastructure scheme.
In many ways, the Republican tax plan is a hypocrisy generator. Many Republicans who repeatedly thundered against deficits when Obama was president now can’t wait to increase the nation’s deficits and indebtednes so long as it entails taxation cuts.
Bob Corker has said he would resist a tax scheme that increases the deficit- will he stay true to his term or be hypocritical? Susan Collins has said she’ll oppose any taxation bill that cuts taxes for millionaires- will she adhere to that promise or turn hypocritical. John McCain says he will resist legislation unless the Senate returns to regular order with real hearings- will he be true to his word? Jeff Flake has denounced the ocean of Trump lies. Will he now vote for a bill that’s marketed with misrepresentation after misrepresentation, among them that the bill will merely increase taxes on millionaires and that the tax cuts will somehow pay for themselves?
In short, the Republicans’ tax plan is a rejection of good governance and sound policy. It would comfort the already very comfortable and further afflict many of the afflicted- all while causing the national debt to rise and leaving less fund to address the true crises our nation faces.
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