Terry Schwadron

Nov 8, 2017

4 min read

Voting No on the Tax Cuts

Terry H. Schwadron

Nov. 8, 2017

There are a lot of reasons to vote against the proposed Tax Cuts bill; more show up daily as people get to find out what it actually is in the language. The appropriate House committee has begun reviews, and the complaints are loud. Still the bill has not changed it basics.

It favors tax breaks for big corporations and the wealthy over the rest of us, as numerous analyses have showed since the bill was introduced last week. But the deeper you read into the language of the bill — which still stands to be changed before any vote — there are more reasons to oppose it.

You have a choice: You can be against what the bill says or what it doesn’t say outright. Either way, you come away saying this is a bad bill as it stands.

The basic promises have not changed: By lowering taxes on corporations, there will be a big impetus for the economy to boom, adding jobs by the ton, general national wealth through repatriation of companies gone overseas, and almost the whole country will see modest tax breaks, estimated up to about $1,200 per household. It would make simplified tax returns easier and double the standardized family deduction.

But then there are the realities behind the promotion language:

· The bill would largely eliminate state and local tax deductions, hitting at largely blue states in the Northeast and California, where taxes are higher than average. That alone prompted several Republican legislators in New York, New Jersey, Pennsylvania and elsewhere to say that they would oppose the bill.

· Groups representing realtors, home builders and others in construction and finance announced opposition after studying the effects of limiting home mortgage deductions to homes valued more than $500,000,, which in urban areas is most.

· Likewise, other provisions eliminate or reduce deductions involving student debt and medical expenses, drawing appropriate negative reaction among those affected, including AARP.

· Among the buried language is an escalating tax increase on every American taxpayer by tied the tax code inflation index to a version of the Consumer Price Index. So, even as the government announces a tax break, apparently those rates will increase.

· In any event, the indices for tax brackets seem to say that as of 2023, tax breaks will end for nearly 40 million in $20,000-$40,000 income and they would be paying more; corporate tax cuts would be permanent. This is helping the middle class? The congressional Joint Committee on Taxation released a new analysis of thebill that showed most tax cuts for lower- and middle-income taxpayers would fade by 2026, while those for the wealthy would continue. The analysis found that about 80% of taxpayers earning between $50,000 and $75,000 would receive a tax cut from the bill in 2019, while 10% would pay higher taxes and the rest no change. Some 75% of those earning more than $1 million would get a tax cut, which would drop to 66% by 2026.

· Included is a provision that uses an allowed deduction for future schooling, or 529 plan, to any children, including “children in utero.” It is an attempt to use the tax law to define fetuses as children, laying the groundwork for more anti-abortion language.

· In the corporate rate language, companies would be allowed to write off the cost of new technology in the current year of investment. Why then would the overall tax rate for corporations also need to be reduced? Trumpists have cited international competition, but it would have been equally possible for the American government to work with other countries to right-size taxes for multinational companies.

· Further reduction of medical deductions will hit at the country’s seniors and the sickest. The emergence of many new prescribed drugs, particularly those tied to immunology, are extremely expensive — and offered to those with chronic disease. With pressures also on health care policies to increase costs to the same population, you might think that required spending on high cost drugs would be protected.

· And, of course, the president has called for lawkmakers to include in the tax cut bill a required end to support for the individual mandate central plank of Obamacare, in other words to use the tax cut bill to repeal the Affordable Health Care.

Any of these are good reasons to vote against the bill. But the biggest is trying to defind exactly the rational for seeking permanent adoption of tax cuts in a way that would require at least 1.5 trillion in increased national debt. By contrast, the last big tax change There is a big debate not being had over whether the economy actually needs a big financial boost. Jobs and other economic measures have slowly and steadily improved since 2008; the jobless rate is 4.1 percent.

What is needed is attention for income inequality, that is, the widening gap between average workers and the top 1% or even 0.2%. There is nothing about this bill that will necessarily improve worker wages. Indeed, the same government voices in favor of tax cuts to corporations and the wealthy are against any changes in, say, minimum wages, overtime, collective bargaining or other means of promoting better wages.

Rather, the program guarantees we all will be paying off national debt for much longer, that the debt will increase each year. And the biggest part of the cost for all of us will be on the coming decimation of the annual federal budget, in order to try to pay for the increase in national debt.