The Impoverishment of Main Street Tax Plan
The destructive Republican denial of health care bills have temporarily been defeated, so now the administration and many Republican congressional leaders are calling for tax cuts and a revised tax code. Once again, they are dangling in front of Americans something many of us desire, in this case more money and a simpler tax code, but the reality is something far different.
Remember, these are the same people who proposed health care legislation supported, at one point, by only 12% of Americans. It would have denied health insurance to up to 32 million people now covered by the ACA and undermined it for millions more. In this tax bill, they are taking aim once again at the economic life and health care of most Americans in order to give tax cuts to the wealthy. If it’s a new day, and these Republicans are in power, it’s a new assault on what so many of us hold dear.
First of all, the legislation was conceived behind closed doors by only a small group of Republicans, who are also planning how to prevent a Democratic filibuster. Secondly, the bill would flatten the number of tax brackets from seven to three and give tax cuts mainly to the rich and corporations. The poorest of us would actually face a 2% rate hike (somewhat mitigated by an increase in the standard deduction and a larger child tax credit), while the rich get a 4% cut. It would cut the estate tax and the alternative minimum tax. Mr. T says he would not benefit from this tax cut, but depending on what his actual income is, he could be saving millions.
Possibly to get the support of Senator Lisa Murkowski and other Republicans, the bill includes a provision opening the Arctic National Wildlife Refuge in Alaska to oil drilling.
The tax plan would cost possibly $2.4 trillion over ten years. How would it be paid for? Supporters say the decrease in taxes would lead to an increase in the economy and thus in government income. But this is highly questionable. The trickle down theory, which states that giving more money to the rich would lead to more jobs and income for the poor and middle class, did not work in the Reagan or Bush years or any other time. President Bush greatly increased the deficit (by 2019, his cuts would be responsible for 40% of the national debt) and his economic policies led to the great recession of 2007, a great increase in unemployment and income inequality. President Reagan did cut taxes in his first year in office. But tax revenues dropped precipitously, the debt increased to almost $3 trillion, unemployment and income inequality soared⏤but he had enough sense to actually eliminate many of his tax cuts when he realized his tax plan was causing dire consequences.
This new tax proposal would lead to an increase in the disparity between rich and poor and would raise the deficit considerably just when the government is calling for increases in defense spending, and infrastructure in the US badly needs an overhaul.
Democrats say Republicans plan to pay for the tax cuts by cutting the programs the poor and middle class depend on: Medicare, Medicaid, Social Security, etc. ⏤just as, back in May, they planned to do with the budget. As Bernie Sanders put it, the plan would be Robin Hood in reverse: taking from the poor and middle class to give to the rich. The tax cut would be the vehicle for the few to undermine the rights, power, and freedom of the many. It must be opposed.