Thursday, December 21, 2017

What Republican tax "reform" really means for working people

All right, so we all know that the Republican tax reform package is an early Christmas gift to their billionaire donors. It has already been confessed by Republican politicians that this was a “pay us or else” proposition from the Koch brothers and the like. Of course it was blackmail—and a fraud. Who were the Koch brothers going to give their campaign contributions to if they were not going to receive what essentially qualifies as a “rebate” for all the billions they have given to far-right causes and candidates? Fanatical progressives like Bernie Sanders? 

The lies pile up on lies. Donald Trump outrageously continues to claim that he will not benefit “one cent” from this tax “reform.” Good god, does he really take everyone (particularly his shrinking working class support) for “retards” with an IQ too low to be measured? Particularly with the “pass-through” tax reductions for “businesses” that create no jobs but lots of additional income for the “proprietor,” Trump comes out of this like a verifiable thief.  It’s only “great” for the rich like him. And why should Trump give a damn about what working people think? This is a man who has known nothing but wealth and privilege since the day he was born; he has no clue about how difficult the lives of working people really is.

And what about those working people the Republican tax plan is supposed to be “for”? For those with poverty-level incomes under $9,500 (or $19,000 married filing jointly) a year, they will not see a tax cut at all—in fact their “after tax” income will barely rise, and may significantly decrease if they actually want individual health care coverage moving forward. And you don’t have to be a math “wiz” to figure out the reality of this “great” tax package, especially if you are on the lower end of the pay scale. If you, like me, decide to take zero exemptions as a single filer and do not itemize, on an income of $30,000 at the current 15 percent tax deduction that is $4,500 in payroll federal income taxes deducted. Minus $10,000 from the standard and personal deduction, that leaves $20,000 in taxable income, which comes to $3,000 in taxes. That leaves a refund of $1,500. With the new tax rate at 12 percent, $3,600 would be withheld, and with the single deduction of $12,000 that would leave $18,000 of taxable income, which comes out to $2,160 in taxes owed. What does that mean? You will not see a noticeable difference in your tax refund size, and it might be even less than before. 

Why is this significant? Under this scenario, your additional after-tax income will be something like $800, which may sound like a “lot” when it appears as a single lump sum. Now if you are paid twice a month, that comes out to $33 a check. Is that a “lot” of money? You tell me. Maybe you could spend that on a movie, or go to a restaurant, buy a book, or “splurge” on steak instead of hamburger—once every two weeks. That kind of "Trump" change is too little to “save” or cause the economy to “grow,” because you don’t have any motivation to use it on higher-priced manufactured goods that maintain jobs; only significantly higher wages can do that. Now if you are in the top one percent of the tax bracket, you will see a significant amount of money, but what are you going to with it that makes the economy “grow” or create jobs? Nothing; you will probably just leave it in the bank. Not for nothing did the one-time Bush tax “rebate” for working people actually work in “bumping” the economy, albeit  briefly: it was enough money to actually purchase “high ticket” items. 

What does tax “reform” mean for businesses that already pay far less than the current 35 percent (because of various exemptions and loop holes)? Filing their taxes may be "simplified," but they are no more likely to use the money to create living wage jobs than before; once more, "trickle down" economics will be revealed to be a right-wing fraud. Meanwhile,  people who pay state and local taxes will have a reduced deductible cap—thus likely seeing less after-tax income than before. The deficit will skyrocket to heights unimagined before (and you thought Republicans were “fiscal conservatives”); Trump and Paul Ryan’s poor-hating budget-cutting to "pay" for the increased largesse of the very richest will create poverty in the US—as a recent UN report warned—that will reach levels not seen since the Great Depression even without an “official” depression; and this bill will essentially “kill” the Affordable Care Act in the next decade, leaving at least 13 million more people than before uninsured. 

There are numerous other “issues” with this tax policy, including tying future tax bracket levels to the chained Consumer Price Index (which allegedly takes into account consumer reaction to higher prices), which will have the effect of raising brackets slower that the true rate of inflation, thus lowering tax savings. The bottom line is that for low-to-middle-income people, tax reform is a con job—even before the “sunset” effect. Even alleged “moderate” Republicans like Susan Collins conned us, and her claim that it is “sexist” to criticize her over her support for the tax bill is just more evidence that gender politics has taken a turn into blatant self-serving hypocrisy. 

Now what? Nothing can be done until 2020, and that will require Democrats to take the presidency, the House and at least 60 Senate seats. Trump and the Republicans have demonstrated their contempt for working people, although many are still blinded from the fact; the question is will working people take back their government from the oligarchy of the rich?

1 comment:

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