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The G.O.P.’s tax overhaul plan, poised to pass Congress this week, sends a clear, unambiguous message: satisfying wealthy donors and corporate America is really all that matters. Concerns about the federal deficit and the poor? Too bad—the top 1 percent are suffering, they need tax relief. Then again, that shouldn’t surprise anyone. The Grand Old Party, since the 1980s, has doggedly pursued similar tax-cut policies.
Oh, and by the way, that isn’t a partisan analysis of the Republican motivation for passing tax reform, they said as much. Senator Lindsey O. Graham, a Republican from South Carolina, and Representative Chris Collins, a New York Republican, both expressed concerns over donor contributions drying up if tax reform fails. And here’s Josh Holmes, former chief of staff to Senate Majority Leader Mitch McConnell: “The donor class…has concluded that the inaction of this administration and Congress is totally unacceptable.”
And while it’s true that middle-class families would see an initial tax break—these tax relief measures would slowly be phased out over the following 10 years.
Using data from the nonpartisan Tax Policy Center, Matt O’Brien of the Washington Post summarizes the plans effect over time: “The top 20 percent of households would receive 63.2 percent of all the money from the Republican tax cuts in 2019, 63.7 percent in 2025, and a full 90 percent in 2027,” additionally “the top 1 percent would see their share of the Republican tax cuts rise from 17.6 percent in 2019 to 22 percent in 2025 and 61.8 percent in 2027.”
Meanwhile, as the rich get richer, Millennials and poor people bare the cost. Over the next 10 years, the Republican plan will add $1.5 trillion to the federal deficit—so much for fiscal conservatism. But wait, House Speaker Paul D. Ryan has a plan to offset revenue reductions resulting from the bill—cut spending. But where? Of course, in the places poor, old, and lower-middle-class people will feel it the most: Social Security, Medicare, and Medicaid. Senator Marco Rubio, a Republican from Florida, is already on board; when asked how to address the federal deficit, he replied “instituting structural changes to Social Security and Medicare for the future.”
What’s more, the “Tax Cuts and Jobs Act of 2017,” as it’s officially called, is being pursued as the super-rich do phenomenally well.
Corporate earnings are at all-time highs, the stock market is soaring, and corporate executives are handsomely compensated. The 2001 and 2003 Bush-era tax cuts, which also disproportionately benefited the wealthy, added “$5.6 trillion to deficits from 2001 to 2018,” according to the Center on Budget and Policy Priorities. The Trump cuts will add $1.5 trillion, or more, yet the Republican Party still enjoys the popular perception of fiscal responsibility. Please, stop pretending.
Here’s the best part: Mr. Trump, despite claiming otherwise, will benefit tremendously from the tax overhaul. And Senator Bob Corker, a Republican from Tennessee, who was initially against the plan, reversed his position after one small provision was added. According to the Center for Economic and Policy Research, the change “would allow income from real estate investment trusts to be taxed at a 20 percent rate, as opposed to the 37 percent tax rate,” saving Mr. Corker nearly $1.2 million.
And if that weren’t enough, a majority of Americans just don’t buy it; only “33 percent of Americans are in favor of it, and 52 percent are opposed,” according to Harry Enten of FiveThirtyEight. Although historically unpopular, the G.O.P. is determined to pacify donors and real-estate financiers, like Mr. Trump, Mr. Corker, and Jared Kushner—so much for draining the swamp.
Let’s not forget about the Democrats, they aren’t without blame, either. They failed to control spending, ballooning the deficit under President Obama. (Although, to be fair, a portion of that spending was in response to a Bush-inherited economy on the brink of total collapse.)
Now, with a strong economy and low interest rates, the responsible thing to do would be to pay down the federal debt, not add to it.
But in the end, both parties have grown more fiscally irresponsible, failing to enact anything close to a balanced budget. And that’s a shame because Americans should care about the debt and deficit. Over the next decade, as the interest on the national debt continues to climb, politicians will likely fail to properly address the problem—when they do, hopefully, it’s not too late.
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