Wel­come to the new gilded age

Cecil Whig - - OPINION -

Pres­i­dent Don­ald Trump said his tax plan would sim­plify the tax code and save money for mil­lions of U.S. busi­nesses and fam­i­lies as he cam­paigns against crit­i­cism the pro­posal is a give­away to the rich.

I ex­pected the Democrats to say that the tax over­haul’s ben­e­fits are skewed to the wealthy, and an in­de­pen­dent anal­y­sis found that the plan may ac­tu­ally raise taxes on nearly a third of mid­dle­class fam­i­lies, crit­i­cism that is weigh­ing on Trump’s plan. Did you know a study by the non­par­ti­san Ur­banBrook­ings Tax Pol­icy Cen­ter, which used de­tails from pre­vi­ous Repub­li­can plans to fill in gaps in the presi- dent’s frame­work, found the Trump plan would raise taxes for al­most 30 per­cent of fil­ers mak­ing $50,000 to $150,000 per year?

Trump claims that the tax cuts for cor­po­ra­tions that are a cen­ter­piece of his plan ul­ti­mately would help mid­dle-class fam­i­lies. So cor­po­ra­tions get to keep more of their prof­its, they will use some of the added in­come to maybe pay work­ers higher wages. That shift along with bring­ing off­shore earn­ings back to the U.S. would trans­late into a $4,000 pay raise for an or­di­nary worker. Can we re­ally breathe new life into strug­gling in­dus­tries and for­got­ten towns?

I dis­agree on just how much in­di­vid­u­als ben­e­fit from cor­po­rate tax breaks, but even Trump’s own eco­nomic ad­vis­ers have said that the $4,000 ben­e­fit would only ma­te­ri­al­ize over eight years. On an an­nual basis, it’s closer to $500. We all know the old say­ing “If it sounds too good to be true”.

WASH­ING­TON — Cor­po­ra­tions are peo­ple, my friend. And this is where they feed.

Room 1100 of the Long­worth Build­ing, with its ionic col­umns, gilt-fringed cur­tains and ea­gle-topped frieze, has for 80 years been the home of the taxwrit­ing House Ways and Means Com­mit­tee. But per­haps never be­fore have cor­po­ra­tions wielded their power as openly as they have here this week.

As the panel moves to ap­prove the Repub­li­can tax plan, this is the room where it hap­pens — where the rich will get richer, where ev­ery­body else will be forced to shoul­der a greater share of the tax bur­den, and where a tril­lion dol­lars of tax breaks for cor­po­ra­tions are be­ing passed by law­mak­ers who work for these very cor­po­ra­tions. In one case, lit­er­ally. On Mon­day af­ter­noon, as the com­mit­tee be­gan its markup of the tax bill, there on the top level of the dais, three seats from the chair­man, munch­ing from a bag of potato chips, was Rep. Patrick J. Tiberi, R-Ohio. Tiberi an­nounced last month that he’s quit­ting Congress to lead the Ohio Busi­ness Roundtable, a group of “the CEOs of the state’s largest and most in­flu­en­tial busi­ness en­ter­prises.” Tiberi filed a no­ti­fi­ca­tion with the House Ethics Com­mit­tee that he was ne­go­ti­at­ing terms of em­ploy­ment with the group.

This isn’t il­le­gal or against House rules. But a law­maker draft­ing and pass­ing leg­is­la­tion that ben­e­fits the peo­ple with whom he is ne­go­ti­at­ing the terms of his em­ploy­ment? That stinks.

It’s al­most as bad as if, say, we had a com­merce sec­re­tary who didn’t di­vulge that he had busi­ness ties to Vladimir Putin’s fam­ily. Or we had a pres­i­dent who, along with his fam­ily, used the fed­eral govern­ment to fur­ther his per­sonal busi­ness in­ter­ests.

So it goes in this new gilded age. The $1.5 tril­lion tax cut has $1 tril­lion in cor­po­rate tax breaks. The idea was that the cor­po­rate tax rate could be low­ered if you elim­i­nated cor­po­rate tax loop­holes. Now cor­po­ra­tions will have the lower rates and the loop­holes.

In­di­vid­u­als lose the abil­ity to deduct state and lo­cal taxes, tax prepa­ra­tion, mov­ing ex­penses and most med­i­cal ex­penses. But cor­po­ra­tions — think of them as Very Im­por­tant Per­sons with su­per­hu­man priv­i­leges — can still deduct these same ex­penses.

At Mon­day’s markup, Rep. Suzan DelBene, D-Wash., quizzed a tax ex­pert on this cor­po­rate ex­cep­tion­al­ism:

“Will a teacher in my district who buys pens, pen­cils and pa­per for his stu­dents be able to deduct these costs from his tax re­turns un­der this plan?” He will not.

“Will a cor­po­ra­tion that buys pens, pen­cils and papers for its work­ers be able to deduct those costs from its tax re­turns?” It will.

“Will a fire­fighter in my district be able to deduct the state and lo­cal sales taxes that she pays from her tax re­turn?” She will not.

“Will a cor­po­ra­tion be able to deduct sales taxes on busi­ness pur­chases?” It will.

As the cor­po­rate wel­fare is doled out, the same bill widens the gap be­tween the rich and ev­ery­body else. The lib­eral In­sti­tute on Tax­a­tion and Eco­nomic Pol­icy con­cluded that the mid­dle fifth of Amer­i­cans would get a mod­est tax cut of $750 (1.4 per­cent of their in­come) in 2018, while the rich­est 1 per­cent would have a cut of $48,580 (2.4 per­cent of their in­come). Even the con­ser­va­tive-lean­ing Tax Foun­da­tion, us­ing a more fa­vor­able method­ol­ogy, ac­knowl­edges the plan would cost the fed­eral govern­ment $989 bil­lion over a decade.

Out­num­bered Democrats can’t do any­thing but yam­mer. Rep. Mike Thomp­son, D-Calif., de­nounced the “wrong­headed, cruel, heart­less” bill, which elim­i­nates tax de­duc­tions that would have gone to those who lost their homes in fires. Rep. Ron Kind, D-Wis., has plans to in­tro­duce an amend­ment adding “fis­cally con­ser­va­tive Repub­li­cans” to the en­dan­gered­species list.

Cor­po­ra­tions have had their way with Wash­ing­ton be­fore. In 2004, Rep. Billy Tauzin, R-La., caused an up­roar when he quit Congress to be­come the top drug-in­dus­try lob­by­ist right af­ter he helped to write and pass the Medi­care pre­scrip­tion-drug ex­pan­sion. He earned harsh de­nun­ci­a­tions as a sym­bol of Wash­ing­ton’s re­volv­ing door.

What’s dif­fer­ent now is the re­ac­tion. Tiberi con­tin­ues to help shep­herd the cor­po­rate tax bill even af­ter nam­ing his cor­po­rate em­ployer — and he is ap­plauded. Five hours into Mon­day’s hear­ing, Democrats and Repub­li­cans alike on the panel gave Tiberi a stand­ing ova­tion when he noted his up­com­ing re­tire­ment and thanked col­leagues for their friend­ship. The panel’s top Demo­crat, Rep. Richard E. Neal, D-Mass., con­grat­u­lated him on “your next en­deavor.”

Good for Tiberi that he has ad­mir­ing col­leagues. If only those fi­nanc­ing his next en­deavor didn’t ben­e­fit so hand­somely from his cur­rent one.

Dana Mil­bank is a syn­di­cated colum­nist. Con­tact him at danamil­bank@wash­post.com.

WASH­ING­TON — It’s not just the usual out­rage on the need for gun con­trol af­ter a hor­ren­dous shoot­ing. It is a wide-eyed, an­gry, un­in­formed, hate­ful, con­de­scend­ing, morally su­pe­rior po­lit­i­cal cas­cade that will prob­a­bly help sell a record num­ber of guns over the days to come, maybe mak­ing it still eas­ier for the next killer to get one.

The killer in this episode, some­one who did just about ev­ery­thing bad you can think of in life, stood in front of the con­gre­ga­tion of a small-town Bap­tist church in Texas and shot ev­ery­one who made a sound, in­clud­ing ba­bies that cried. Twenty-six peo­ple died. Two good guys chased the killer, he crashed his truck and shot him­self to death af­ter be­ing wounded by one of the pur­suers.

“As my col­leagues go to sleep tonight, they may need to think about whether the po­lit­i­cal sup­port of the gun in­dus­try is worth the blood that flows end­lessly onto the floors of Amer­i­can churches, el­e­men­tary schools, movie the­aters and city streets,” said Sen. Chris Mur­phy, D.-Conn., in the first part of an in­ter­est­ing, blis­ter­ing self-in­dict­ment. “The ter­ri­fy­ing fact is that no one is safe so long as Congress chooses to do ab­so­lutely noth­ing in the face of this epi­demic.”

Note that this politi­cian is bla­tantly say­ing that those not want­ing the laws he wants have been bought out by big money even as they know peo­ple will die. He is ob­vi­ously point­ing a fin­ger at the Na­tional Ri­fle As­so­ci­a­tion, which is not pow­er­ful so much be­cause of gun-maker dol­lars as be­cause of mil­lions of cit­i­zens who hap­pen to vote. That’s known as free speech and democ­racy. In fi­nan­cial terms, The Wash­ing­ton Ex­am­iner re­ported a cou­ple of years ago, the lobby of the dairy in­dus­try spends twice as much as the NRA.

Mur­phy might also want to pause and think for a mo­ment about the thou­sands of gun laws al­ready passed at the fed­eral, state and lo­cal level and what grand things they have or have not brought to pass. Pres­i­dent Barack Obama kept try­ing to get Congress to fund a study by the U.S. Cen­ters for Dis­ease Con­trol, failed, de­cided to rely again on good, old uni­lat­er­al­ism, got him­self a 2013 study and then zipped his lips. It couldn’t find any as­sur­ance these laws had done any good at all.

A pos­si­ble rea­son? We have some­thing more than 300 mil­lion guns in this coun­try, an av­er­age of 100 guns for every 100 per­sons, it is noted, and keep­ing some­one from get­ting one of them is not easy. Crim­i­nals tend to get guns other than through reg­u­lar stores. There’s such a thing as in­ad­e­quate en­force­ment, which was the tragic case with the Texas killer, part of whose past would have helped keep him un­armed if prop­erly re­ported.

It’s also the case that more guns don’t nec­es­sar­ily mean more deaths. In the 1990s, when gun pur­chases were sky­rock­et­ing, gun homi­cides were drop­ping by half. Rus­sia, with an av­er­age of nine guns per 100 peo­ple and ex­tremely tough gun laws, once had four times the mur­ders we have, a study tells us.

In the mean­time, it is not as if those cit­i­zens fear­ful of Demo­cratic overkill have noth­ing on which to base their fears. There are all kinds of stud­ies that have shown cit­i­zens save them­selves from foul crim­i­nal in­ten­tions lit­er­ally thou­sands upon thou­sands upon thou­sands of times a year, and there have been prom­i­nent Democrats en­dors­ing con­fis­ca­tory mea­sures such as those used in Aus­tralia.

None of this is to say we should for­get pre­ven­ta­tive mea­sures, such as ef­fec­tive po­lice work, sup­port of po­lice, ad­dress­ing cul­tural is­sues and do­ing more to iden­tify the dan­ger­ous among us if rea­son­ably pos­si­ble. Some new guns laws make sense, in­clud­ing dis­al­low­ing any means of con­vert­ing semi-au­to­matic weapons into au­to­matic weapons. I my­self be­lieve in univer­sal back­ground checks.

What I do not be­lieve in is over­stated, po­lit­i­cally ad­van­ta­geous hys­ter­ics that can do more to make things worse than bet­ter.

Jay Am­brose is an colum­nist for Tribune News Ser­vice. Read­ers may email him at speak­to­jay@aol.com.

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