The new tax bill that the House of Representatives passed Thursday can be safely described as unpleasant.
Tax plans are confusing. They tend to be full of numbers and technical jargon. They give the gift of throbbing temples to most of us. But one thing, at least, is easy to grasp. It’s going to hurt the middle class terribly. This plan is legislative savagery at its worst.
As American citizens, we have a duty to stand up and oppose this criminal concept with all the force we can muster. If we do not, the same GOP Congress that attempted to repeal the Affordable Care Act in favor of total nonsense is all but certain to approve it. This new scheme is pitiless even for Trump. Its implications are brutal. It was hard to believe the budget plan the Senate just signed off on could be approved of by any human being with a heart.
The Trumps will save more than $1 billion overall under the GOP tax proposal with most of that amount coming from a repeal of the estate tax, according to an analysis NBC News commissioned of Trump’s one known 2005 tax return and his estimated net worth
As expected, the plan would help the wealthy at the direct expense of the middle class. It will actively hurt the poor. It is also known that foreign oligarch investors, including many from Russia, will be the beneficiaries.
The tax break improves for each income level, meaning that the people who need the most help get the least of it. The top 1 percent would get an 8.5 percent break.
Many Americans will indeed receive a tiny, immediate tax cut, but in the long term they will end up paying significantly higher numbers overall. Better than a third of American taxpayers are living on levels of income that fall below their standard deduction and personal exemptions. According to New York University law professor Lily Batchelder, that group will derive no benefit whatsoever.
This favoritism to the wealthy will increase both their holdings and the nation’s debt tremendously. The richest Americans are the biggest source of tax revenues. Trump has no answers as to where we might find a suitable substitute for them.
The plan will do great damage to parents of school-age children. The head of household filing status will be eliminated. They will lose the personal exemption middle-class families used to receive for each child. That means almost 10 million parents will see their taxes increase.
A large debt increase of this type tends to stunt economic growth in the long run. When a country’s debt-to-GDP-ratio is more than 100 percent, investors get concerned. They demand higher yields on the nation’s debt, increasing interest rates. Those higher rates slow growth. It’s the old question of risk vs. reward.
That money will be unavailable for the public use. It will not be there for the building of infrastructure or other job-creation uses. It will also not be there in case of an emergency, like the California wildfires or Hurricane Harvey.
The administration’s plan is relying on archaic and outmoded ideas of supply-side economics. Under the guidance of this principle, large-scale tax cuts are granted to big corporations. In an ideal world, these corporations would wisely invest this added capital into projects that create more jobs.
In the real world, however, the one in which Millennial Democrats is slogging through this article, this never worked out as it was supposed to. During Ronald Reagan’s administration, underperformance in this area led to the crisis we know as inflation. This was held up and exemplified, and given the name of Reaganomics. And that was still at a time when the highest tax rate was 70 percent.
These days tax rates are half what they were in the 1980’s. The results of pursuing a trickle-down economic strategy now would be far worse.
“I think it will go down in history as one of the worst budgets Congress has ever passed.”