Terry H. Schwadron
Nov. 15, 2017
The tax bill isn’t bad enough that Senate Republicans now want to add Trump’s suggested repeal of Obamacare as a throwaway?
Senate Republicans said this week that they will include a major change to health care just to help raise the money for their tax giveaway to the wealthy. That’s right, at least 13 million people over 10 years will lose health care to help pay the enormous price of these corporate tax cuts and reduction of income tax brackets, as well as elimination of state and local taxes as a federal tax deduction. To make the package complete, the Senate Republicans will end any individual tax breaks by 2025, while keeping corporate breaks permanently. This is a benefit for the middle class?
Not only will they add the repeal of the key plank of the Affordable Care Act, the tax bill actually worsens costs to seniors and the sick by eliminating or limiting medical deductions in itemization. Repealing the mandate would undermine other key parts of Obamacare like a ban on discriminating against people with pre-existing health conditions.
Republican Senators may not mean it, but they will create corporate tax breaks on the literally aching backs of those with the biggest chronic health costs. In what universe is this progress or reasoned thinking or God-forbid caring?
Indeed, they say, well look over here, there’s this other compromise bill that Senators Lamar Alexander (R-Tenn) and Patty Murray (D-Wa) had worked out that might extend Obamacare financial supports for two years. We can pass that separately and, voila, everyone will be happy.
Moreover, according to Senate Majority Leader Mitch McConnell, more senators are bound to vote for the combined tax-health bill because it will provide money from a death of Obamacare to allay deficit fears of some Republican senators. What? These senators would rather put 13 million on Healthless Street than they would put the nation another trillion in the hole? Um, why not just vote no on all these alternatives.
I’d like to see Republican senators John McCain, Lisa Murkowski and Susan Collins turn around and tell their Republican colleagues, the trio that stood up to the leadership before on health care, that this approach is simply wrong, and that they will not support the tax bill because of it.
Personally, I find this approach outrageous.
Sen. Collins (R-Maine, said she was concerned about including the mandate repeal while the Senate was still addressing the health care compromise. “I personally think that it complicates tax reform to put the repeal of the mandate in there, particularly if it’s done before the Alexander-Murray bill passes because of the impact on premiums” Collins said.
Senate Minority Leader Charles E. Schumer (D-NY) said including a repeal of the mandate in the tax bill would undercut Democratic support for the Murray-Alexander compromise.
And the House version of the tax bill does not include an Obamacare repeal. The House plans to vote on its bill next week.
Meanwhile, White House operatives are finding pockets of uneasiness for the tax bill in strange places. Economic Adviser Gary D. Cohn was speaking to CEOs at a Dow Jones conference in New York on Monday when he asked for a show of hands for those who would be using the coming corporate tax breaks to invest in growth and new American jobs. Very few hands went up.
The White House message has been consistent: Tax cuts will boost business investment in new factories, more equipment and more jobs. But these CEOs were saying American companies already are seeing record profit, and if they wanted to invest, they have plenty of money on hand to do it. In addition, a Bank of America-Merrill Lynch survey this summer asked 300 U.S. business executives what they would do after a “tax holiday” that would allow them to bring back money held overseas at a low tax rate. Top responses were to pay down debt, buy back stock, and mergers. Investment in new factories and research were low on the list.
That matches what happened after the 2004 tax repatriation holiday when U.S. companies spent the majority of money returning from overseas on stock buybacks. It was a payday for Wall Street investors that generated little benefit to the middle class and wider economy.
Trump’s tax plan also calls for the reduction in the corporate tax rate from 35% to 20%. The plan also includes a provision to allow companies to write off the costs of any new capital purchases in the next five years.
Let’s at least demand honesty in what these folks want to do.