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Republican Tax Plan: Huge Tax Gains for the Rich. Huge loss for the Middle Class

November 13th, 2017 · No Comments · Politics, Populism, Taxes

by
Joseph O’Shaughnessy

If you live in a middle western state, like Illinois, you will hear self-serving radio commercials praising Republican House members for the…presumed…tax  plan now in Congress. The Republicans are trying to get out in front on this issue…a tax cut that is going to make the rich richer and the poor…if not poorer…no better off.

Some people are not happy about it.  Congressman Ric Larsen of Connecticut is fuming over the fact that it will damage the lives of many Americans, pretending to give them minimal tax cuts, while removing many of their biggest deductions. Jared Bernstein, a distinguished economist, says that in the long run he and other economists feel that it will create huge debt, only for the benefit of the rich. Finally, Bernie Sanders lays it all on the line…who is behind the tax cuts…who benefits and why.

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If your income is under $24,000, you probably do not pay income tax anyway. But if you are a hedge fund manager on Wall Street, you could likely get a tax cut that would increase your income by more than $200,000. That will not create new jobs. Hedge fund managers and others in the financial field do not create more jobs…unless you work in Wall Street.

You must understand this one fact. Citizans’ United was cooked up by very rich individuals who wanted to give as much money as they could to politicians who would do what they tell them to do. And that is to write legislation to cut their taxes. That law, that piece of legislation that the Republican Supreme Court approved allows billionaires to spend hundreds of millions of dollars to elect legislators at every level who will do their bidding. In addition, they have sponsored hundreds of Right Wing radio propagandists who are now beating the drums for this tax cut, all using the same talking points.

Only a small increase in GDP, “point-four percent” you will hear all over television and radio, is needed to make this tax cut revenue neutral. It is a lie. It will not bring the GDP up to the point that it needs to be to prevent huge deficits–which means–if Republicans stay in control, massive cuts to Social Security and Medicare, plus the absolute certainty of the total end to Medicaid.

This tax plan will not put more money in your pocket–not enough to risk losing Social Security or Medicare. It will not create more jobs from some magical provision that brings jobs back to the U.S. There is no such provision in this law or anything close to one. Jobs have been sent to Asia because wages are less than ten percent of what they are in the U.S. And because Republican lawmakers control Congress.

Here is what you need to know about this tax bill…for your long-term financial safety and your long-term solvency.

1. The tax bill is for the rich and against your interests. Here’s the simple fact that proves it. The bill would reduce the estate tax. Not for the average person…do you have someone leaving you more than $10,000,000? Then this tax bill is not for you, nor anyone in the upper middle class. No matter what the Republicans say about the tiny cuts to the poor and the middle class who pay very little in taxes anyway, this bill is bad for you. As Rep. Larsen said on the video, some of these tax cuts for the middle class sunset but those for the rich go on much longer. The fact is that all you need to know is that the Republicans want to eliminate the estate tax. That alone will save the Koch Brothers $30 billion.

2. The corporate taxes will not, categorically, will not bring home jobs. This is a lie. The idea that somehow reducing corporate tax rates to 25% or 15% will bring jobs home from Asia is nonsense. The argument is that because American companies pay higher taxes here at home, foreign companies will come here and locate is ridiculous. That won’t happen. And if the idea that suddenly lower taxes will bring American company headquarters back home, there is an easier way to do it. Write a law that says if your corporate headquarters is outside the U.S. then you are a foreign company. That will bring companies home tomorrow. I promise you, if you wrote that kind of law, you could raise taxes and they’d come home. IBM does not want to be importing and paying tariffs on its own products coming into the U.S., its major market. We could cut the corporate taxes. WE could easily cut corporate taxes to 25%, put a floor under deductions and tax benefits and charge profitable corporations a minimum tax of some kind. That would be fine but that is not what this tax bill does.

3. Jared Bernstein is not the only economist to say that the national debt will be increased substantially from these proposed tax cuts and that it would be disastrous for the Middle Class. Many other economists, including people like Nobel Laureate Paul Krugman and other university and government economists agree that, while we could, with the right bill, lower corporate taxes…this is not the right bill. Corporate taxes are being used in the wrong way to front for a bill that is basically a giveaway to billionaires like Trump and the multi-multi-millionaires in his Cabinet and his friends like the Koch Brothers and the Waltons.

4. Only about half of all people working today have close to the amount of savings they need to retire…and that means sufficient funds to supplement Social Security. Without Social Security many would be destitute. Only 40% of Americans have a 401K. Only 7% of Americans belong to unions and only 12% of Americans work for federal, state and local government unions and therefore have fixed pensions. And the Right Wing is hammering away at public unions and teachers daily, trying to dissolve unions in every state in the country. The Right Wing rich have their radio talk show propagandists bombarding the hicks with their message that teacher pensions and civil service pensions have to go because “we just can’t afford them anymore.” That’s a lie. We can afford them if we stop giving all our state and national revenues back to billionaires who used to pay 74% of their income at the top rate before Reagan but now on average send less than 25% of their income to government. The cold hard fact is that since Jimmy Carter we have never had a national debt under a trillion dollars. Since Reagan we’ve never had a balanced budget except under a Democrat, Bill Clinton.

4. As Bernstein said, inequality in this country is not getting better…it is getting worse. Soon, we will be living in a Latin American style oligarchy, with a handful of rich and a huge mass of truly poor citizens. Or it could be worse. If the rich control the politicians…and they already control most of them…one day they will realize that it is better for them not to have elections any longer…or totally rigged elections such as those in Russia. We are already in the fist phases of Neo-Fascism…complete control of the state by one political party. The oppressive phase…shutting down the media and public protest is phase two of Fascism. Believe me, you don’t want to get to phase III, because, if you do, you may not make it to phase IV.

All Americans up to the point that their incomes hit $104,000 per year…everyone…pays payroll taxes of about 12% of income into common insurance fund through premiums that provide for a minimal monthly stipend at age 66, called Social Security, and reduced prices and guarantees of health care services called Medicare. Those payroll deductions, therefore, should be most accurately referred to as insurance premiums, and just as with any premiums they should be redeemed, or all that have not been redeemed should be repaid.

The Right Wing, the Tea Party Republicans, and..now…all Republicans in Congress except for approximately 3 Senators, and even they most of the time, vote for reductions and/or repeals of health services and retirement funds distributed by government, but never the return of all unused Social Security and Medicare funds and payments of law suit outcomes as would happen if private health insurance premiums were simply stolen and no benefits were delivered.

Given all these facts, why anyone making less than $104,000 a year would ever, under any circumstances, vote Republican is a mystery to me. People pay into Social Security and Medicare funds for all their working lives…usually about 45 years. The idea that a handful of billionaires think that they can pay off a bunch of crooked Republican politicians to help them steal those funds from the rest of us is much more than merely reprehensible.

Those funds bring in about $900 billion a year, from average taxpayers (remember, the rich pay taxes on SSI and Medicare up to $104,000) and the costs to government are about the same…$900 billion (just slightly more now that Baby Boomers have kicked in for a few years.) But Americans have put another $3.5 trillion into those funds that were never spent…a surplus. That money was always designed to keep the Social Security and Medicare funds solvent, or it would be (and has been) necessary to raise the deductions. But this is not what the Right Wing Billionaires want. They want to do away with Social Security so that they don’t have to pay back that $3,5 trillion to the Baby Boomers who will now retire, asking: what happened to those funds that were deducted from my payroll to be used for my retirement?

You see, folks, THAT is what this entire tax cut scam is all about. Cutting government revenues, giving the money to billionaires to use to keep telling the big lie…that Social Security and Medicare are un-affordable any longer.

Yes, they are and they will be, if we pass tax cuts like this and continue to reduce government revenues.

The Big Lie. Call your House member and Senator. Tell them…No more tax cuts!

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