GOP tax plan is cynical wealth redistribution
The GOP-approved tax plan soon headed to the president will be a massive wealth transfer to corporations, the rich and red states that helped put Donald Trump in office.
Blue states including California will bear the brunt, as the changes wipe out deductions for state income taxes, cap the property tax deduction at $10,000 a year and, under the House version, wipe out the mortgage deduction for future home purchases.
There are still key details that Republican leaders must hammer out to reconcile differences between the House and Senate versions. But when the Senate approved its plan Saturday morning, any hope of stopping this train wreck was lost.
The question now, after both houses added major policy changes, is how bad the final version will be.
They will likely keep the Senate provision wiping out the health insurance mandate penalties that are key to keeping rates down for everyone. The Congressional Budget Office predicts insurance premiums will rise by about 10 percent a year as a result and 13 million people will drop coverage by 2027. The UC Berkeley Labor Center estimates that includes up to 1.7 million Californians.
At a time when we should be moving to alternative forms of energy, will Republicans open up Alaska’s Arctic National Wildlife Refuge to oil and gas drilling? That provision was added to the Senate version to win support of Lisa Murkowski, R-Alaska.
As if there weren’t enough sweeteners for the wealthy in this plan, do we really need to eliminate the estate tax, which already excludes the first $5.49 million of inheritance from taxation? Both versions would double that, with the House bill eliminating it altogether after 2024.
And will they side with the House to break down the separation between church and state by repealing the Johnson Amendment, a 63-year-old prohibition on nonprofit groups engaging in political activism?
The Senate plan would cut tax revenues by $1.447 trillion over the next decade, according to the congressional Joint Committee on Taxation. Republicans argue that will pay for itself when corporations and rich people, who are the biggest beneficiaries, invest their tax savings in the economy.
Every analysis of the bill debunks such trickle-down nonsense. The joint committee estimates that even after anticipated economic growth, the net cost of the plan will be $1 trillion over 10 years.
Future payments on that debt will crowd out available funds for services. Which fits neatly into the GOP playbook of shrinking the size of government.
We don’t know yet exactly which programs will suffer the greatest cuts, but this Republican congress is more likely to target health care for the poor than, say, military spending.
It was perhaps most telling on where their priorities lie when Senate Republicans opted to make the tax cuts for corporations permanent but provided a 10-year sunset for cuts that would benefit individuals.
Don’t let anyone tell you this is tax reform. There is no reform in it, just a cynical redistribution of wealth to Republicans’ donor base.