The so-called tax reform bill is not yet a done deal. That’s good, because it doesn’t reform anything and it’s not just about taxes.
The Senate passed its version of the bill about 2 a.m. Saturday, just hours after it was printed, meaning lawmakers didn’t have time to read the bill before they voted on it. Major differences between this bill and a House-passed version go to conference committee before a final version can be sent to the president’s desk.
But as usual, things can get screwy when Donald Trump gets involved. He indicated just hours after the vote that he may change his mind on the new proposed corporate tax rate. That’s right, Trump wanted to change his mind on a bill that just passed. If we thought Senate Leader Mitch McConnell was a good, well-intentioned lawmaker, we might feel sorry for him. But he’s not, and we’re not.
Like us, McConnell must be thinking Trump is the least qualified elected official ever to hold office. And that includes Mayor Stubbs of Talkeetna, Alaska, who served for 15 years despite the fact he was a cat.
A lot of cross-talk is going on about what the tax bill means, and much of it is by people who are not economists, tax lawyers, public policy experts or even patriotic Americans. Discussion is being driven by Republican ideologues and deaf, dumb and blind Donald Trump supporters, which is sad because the bill will result in a cut in services for disabled people.
Senators couldn’t resist piling on pet projects as Republicans talked amongst themselves, and a conference committee will iron none of these out as a compromise bill is forged. Both the House and Senate bill include major tax cuts for corporations (like the Trump Organization) and the elimination of estate taxes (for wealthy families like the Trump klan). Major differences, however include:
- The House bill preserves the Obamacare mandate to require people to buy insurance in order to spread out the costs of health care. The Senate version includes “skinny repeal,” an effort that failed before because it would toss millions of voters out into the mean streets with no insurance.
- Both bills cut taxes on people and corporations. We are not making this up, the Senate bill snatches the tax cut on people back in 2025, but makes it permanent for corporations. The moral to this story is that your senators care more about their rich campaign donors than they do you, the people who voted for them.
- The Senate bill does not eliminate estate taxes altogether, but doubles the amount that can be passed to heirs — $11 million tax free. The House version is a sleight of hands maneuver that doubles the exemption temporarily and makes allowances on capital gains taxes, then eliminates it entirely in 2024.
- Both houses increase the child care tax credit. But the millions of low-income families who don’t pay taxes aren’t eligible for it.
- The House cuts the seven-tiered tax bracket to four brackets and will cost $1.9 trillion over 10 years ballooning the national debt. The Senate keeps it at seven and will cost a whopping $1.17 trillion over 10 years.
Trump has protested mightily that he won’t benefit from the tax bill, and that his wealthy friends are mad at him about it. Lie, on two counts. First, he has no friends, and secondly, he’ll benefit from the sweet golf course tax exemption, estate tax provisions, tax cut on corporations, and elimination of the alternative minimum tax to the tune of $1.1 billion dollars, according to a PolitiFact analysis.
So billionaires (Trump), big corporations (Trump), people with a lot of money in the stock market, and rich kids (named Trump) stand to gain the most from the tax bill. Meanwhile, low-income families, kids (other than those named Trump) who have to pay for the increased national debt, people who can’t afford the high cost of health insurance, college students and people with large medical debts stand the most to lose.
Retirees and seniors will also get a financial shock when lawmakers make cuts to Social Security and Medicare to pay for the cost of the bill. “We have to generate economic growth which generates revenue, while reducing spending. That will mean instituting structural changes to Social Security and Medicare for the future,” acknowledged Sen. Marco Rubio of Florida.
In addition to Medicare and Social Security cuts, the American Association for Retired Persons estimated the bill would increase taxes on 1.2 million taxpayers age 65 and older in 2019, and increase taxes to 5.2 million older taxpayers by 2027.
Retiring Sen. Bob Corker of Tennessee is the only Republican who joined Democrats voting against the bill. “I am not able to cast aside my fiscal concerns and vote for legislation that I believe, based on the information I currently have, could deepen the debt burden on future generations,” he said.
Sen. John Tester of Montana tweeted a video of himself just moments before the Senate vote, showing him slamming a copy of the bill down on his desk. “I was just handed a 479-page bill a few hours before the vote. One page has hand scribbled policy changes on it that can’t be read. This is Washington D.C. at its worst,” he wrote.
And if the late Mayor Stubbs in Talkeetna would have been nonplussed about the tax bill, it’s because the Senate version included a pet project provision that would allow drilling in the Arctic National Wildlife Refuge. The measure has been opposed by Democrats each time Alaska Sen. Lisa Murkowski proposed it because of fears of environmental calamity in the sensitive region. Murkowski was a holdout on the tax vote until the end, when it was added to buy her vote. Yes, this is Washington D.C. at its worst.
We are grateful to the Washington Post, Tax Policy Center, Joint Committee on Taxation and Congressional Budget Office for the numbers. Utter disgust and analysis contributed by The Shinbone Star Staff.