Another mean bill
The Majority in Congress, I believe, has given up on tax reform—and instead, they are trying to enact the largest transfer of wealth in our nation’s history, paid for by mortgaging the future of our families.
There is a need for tax reform and middle-class tax relief. Unfortunately, in my opinion and of most economists, that’s not what the House Republican leadership plan does. It gives massive tax cuts for the wealthiest corporations and richest Americans in hopes that it will promote economic growth to trickle down to help average Americans. The claim is simply not true.
Corporate leaders have made it clear that they are investing in things to make them more money. They are not going to invest in higher wages for workers, research and development, or plant expansion. They will, however, use their huge tax savings to increase dividends, buy back their stock, pay down debt, or merge with other large corporations.
Republican priorities are clear. The bill gives nearly half of its benefits to the top 1% and largest corporations—and they’re permanent. The provisions that benefit average Americans are temporary. As a result, during the next 10 years most middle-income Americans will pay higher taxes.
Perhaps most egregious of the permanent benefits for the ultra-rich is the complete elimination of the inheritance tax. This will give fewer than 3,000 families each year a massive tax break. Over the next 10 years, these families would save a total of $151 billion in tax cuts. Most of the largest estates have never been taxed once, because billions of dollars come from appreciated and untaxed capital gains.
I believe the cruelest part of this upside-down tax scheme is that these benefits for the privileged will be financed by our children and grandchildren, who will be saddled with $1.7 trillion in new debt. Soon the national debt will exceed the total size of our economy.
The hypocrisy is astounding. Remember the howls of outrage from my colleagues on the other side of the aisle when—in order to save the global economy from collapse during the 2008 recession—deficit spending was used to stabilize the economy? The American Recovery and Reinvestment Act was a bold plan, investing in things like infrastructure and medical research, while giving most Americans a tax cut. Today, we’ll have massive new debt, while ignoring those priorities.
As people take a closer look at the proposals under consideration, they find a list of cruel and unnecessary provisions.
- It makes college less affordable by taking away 12 million people’s ability to deduct interest on student loans. It penalizes struggling graduate students by taxing their tuition waivers as income! They won’t be able to afford to accept these positions with little income to pay for their increased tax burden.
- The proposed “Alzheimer’s tax” on about nine million middle-class families denies a tax deduction for huge medical bills, increasing their taxes by almost $90 billion.
- It even puts at risk 50,000 jobs and billions of dollars of investment in clean wind energy as the plan repudiates a bipartisan agreement, after these companies took Congress at its word and began these investments.
Every day new information will leak out about what this disastrous process has in store for the American people. It’s unclear if the House proposal can actually be merged with the Senate bill, which is being voted on this week and equally bad in different ways. What we do know is that they will try.
Americans have much to be thankful for during this holiday season, but with these tax proposals they face a much grimmer outlook—mortgaging their children’s future with massive debt, increased middle class taxes, and a lost opportunity to make the tax code fair.
I’m thankful that there’s still time to stop them.
Member of Congress