Welcome to the new gilded age
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 firstname.lastname@example.org.
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 email@example.com.
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