I mentioned recently about the audaciousness of the new tax bill expected to become law soon. Some years back I also mentioned that Republicans are basically sadists. This newest version of the bill that passed Congress this week proves Republicans have doubled down on both their bill’s audacity and its egregious sadism. I really hope they don’t believe their own rhetoric that this will actually grow the economy and make the middle class prosperous, since all previous attempts have proven trickle down simply doesn’t work. So I prefer to believe they are simply mendacious.
Apparently the House-Senate conferees decided to go through the bill and look for ways to make their tax bill even more in their favor and to screw the working classes even more. Now there are new tax break for real estate investors. It’s hard to believe Trump and his cronies didn’t phone this one in, not that Trump was not going to profit handsomely even before the addition of these provisions.
This bill has all the hallmarks of legalized bribery. Basically it’s a scheme to foist $1.5T in new debt on the American taxpayer and redirect the vast majority of this debt directly into their pockets. It’s like going to the Federal Reserve, taking $1.5T out of their vaults and doling out $1.4T of it to rich people and corporations over the next ten years.
Ah, but not for us little people. They have dangled some candy in front of us, but those who taste it are going to discover its initial sweet state will soon turn bitter. Consider:
- You may pay a few hundred dollars less in taxes per year over the next ten years. But by getting rid of the individual mandate, the rising cost of health insurance premiums are going to quickly negate any of this extra money. After all, it’s not how much you are taxed; it’s how much you keep. Those who figure they can’t afford health insurance will opt out now that the penalty for not having insurance has gone away. These are illusory savings. Medical debt is likely to wipe out any savings they accrue by dropping health insurance. As for the rest of us with health insurance our costs will go up and up until we too decide we can’t afford it either, leading to ever-higher levels of working class impoverishment. This makes a lot of sense though if you are sadistic, and Republicans are sadists.
- As a Disney heiress points out because of “pass through” provisions in the bill her income (none of it earned) will be taxed at a rate lower than most you saps who must work for a living. This is not entirely new. Those living off of capital gains and dividends have been tax-advantaged over those most of us who earn wages for a long time while doing nothing to earn it other than occasionally discussing their portfolios with their financial adviser. This just widens the hole. Remember how Trump was going to drain the swamp? He’s making it deeper. However, this makes a lot of sense though if you are sadistic, and Republicans are sadists.
- Remember that Alternative Minimum Tax that made sure that many of these loopholes for the rich were mitigated by requiring them to pay at least some reasonable tax? It’s gone. Oh, and fewer wealthy people will have to bother their executors with the duty of paying estate taxes. The estate tax limit has been doubled meaning more money will go to their kids who earned none of it. Leona Helmsley once famously said only the little people pay taxes. Republicans are proving her right. This makes a lot of sense though if you are sadistic, and Republicans are sadists.
- Why do Republicans hate charities? The charitable deduction is effectively gone for most of us, because they have doubled the standard deduction. This dries up any incentive other than pure kindness and a philanthropic nature for anyone but the richest to give any money to charity. If I had to guess we’ll see a lot more money going to Koch-funded charities and a lot less to the American Red Cross. It’s a likely red alert for charities across the country, who can almost certainly count on fewer donations in 2018 and basically forever. But this makes a lot of sense if you are sadistic, and Republicans are sadists.
- Republicans don’t like blue states. How dare they vote for people they don’t like! Now to add insult to injury by capping deductions for property taxes they are effectively screwing the bluest of the blue states. States where property values are high (predominantly blue states) charge the most in property taxes. Since most states base state income taxes on the adjusted gross income on your federal return, this effectively cuts revenue for these states, which means fewer state services like money to public schools, police and food stamps. Blue states already send more federal revenue to red states than they receive. This actually makes it worse, and makes it permanent. This makes a lot of sense thought if you are sadistic, and Republicans are sadists.
- Who doesn’t like teachers? Republicans don’t, perhaps because they suspect them of teaching subversive liberal ideology. Anyhow, our teachers who are already vastly overworked and vastly underpaid while serving an incredibly vital role in our nation’s future prosperity and going to be screwed some more. The expenses they paid out of their own pocked for school supplies for their own students that their own school districts were too chintzy to pay are no longer deductible. Apparently, Republicans loathe teachers and look forward to future generations of even stupider Americans. This makes a lot of sense thought if you are sadistic, and Republicans are sadists.
- Apparently Republicans also hate people with business expenses. It used to be that you could deduct these expenses in excess of 2% of your AGI. That deduction is gone with the wind too. So if your employer does not reimburse your business expenses, essentially Republicans in Congress have reduced your salary. This makes a lot of sense thought if you are sadistic, and Republicans are sadists.
There are also indirect ways the bill will further screw over the rest of us. Republicans are already making noises about how the $1.5T deficit that’s part of their tax reform means we need more austerity because … omigosh, the deficit’s so high! They obviously won’t repeal their tax cuts or defense spending so they are talking about “entitlement reform” instead. First out the gate will be automatic cuts to Medicare that will start in 2019.
These would start on January 1, 2018 but Trump will wait until January 1 to sign the bill so these cuts start in 2019, conveniently after the midterms.
Thankfully, Americans aren’t nearly as stupid as Republicans think that we are. This is borne out by polls that show the law is deeply unpopular, in spite of the fact that most people will initially pay fewer federal taxes. It’s the most unpopular bill polled in the last forty year.
They will get their comeuppance next November 6.