William Checkvala: Questions about the Trump/GOP tax cuts and jobs scam
December 1, 2017
On Nov. 16, House Republicans, including Congressman Doug LaMalfa, voted to pass a tax reform bill that is being sold to the public as tax relief for the middle class, but is in fact an early Christmas present to their wealthy donors and large corporations, many of whom have threatened to withhold their financial support if the GOP-controlled Congress doesn't get this tax scam rushed through and on Trump's desk by the end of the year.
As of this writing, it is being rushed through the Senate, where they have been crafting their own version of the bill, and it is even meaner and more unfair to the middle class than the version that recently passed in the House.
Well, I say, "Wait a minute, not so fast!" Like many of my fellow taxpayers, I have some serious reservations about what's in these plans and concerns about the way in which they appear to give generous and permanent cuts to large corporations and top-tier earners, while providing only moderate and temporary tax relief to the people that need it most; the middle class.
Oh yeah, and did I mention they do it all by adding $1.5 trillion to the deficit?
So, here is my short list of questions I think we the people need to be asking our representatives in Congress:
Question #1. How is repealing the Estate Tax (House), or raising the threshold from $5.5 million to $11 million (Senate), going to help the middle class or create new jobs? Let's face it, people with estates worth $11 million are not middle class nor are they in a position to use their tax savings to create jobs.
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Question #2. How will repealing the Alternative Minimum Tax help the middle class or create new jobs? People with an annual salary of $200,000 or higher, which is the group this change is targeted to help most, are not middle class and are not in a position to use their tax savings to create new jobs.
Question #3. How is lowering the tax rate for the bogus "pass-through" businesses many high-income earners use to avoid paying their fair share of taxes helping the middle class or creating new jobs? According to the Tax Policy Center, this change will disproportionately benefit wealthy investors, not the small brick-and-mortar business owners who would be more likely use their savings to expand their business and create new jobs.
Question #4. How will repealing the ACA mandate (Senate), which will force 13 million Americans out of the health-care system and raise premiums for everyone else, help the middle class or create new jobs? I see no connection between the two. If anything, a hike in premiums will hurt middle-income families far more than people in higher-income brackets.
Question #5. How will allowing big businesses to keep their deductions for state and local taxes, while taking away that same deduction from the individual taxpayer, help the middle class or create new jobs? Well, it won't. What it will do is shrink the amount of tax relief middle class families who itemize deductions receive, and if past behavior is any indication, most businesses will use their tax savings to either reward their investors in dividends or pay bonuses to their CEOs, as opposed to reinvesting it in ways that create new jobs.
I have many more questions, like how sunsetting the new rate cut and other tax benefits for individuals in 2025 to make the 43 percent tax cut for large corporations permanent, or how tinkering with the deductions for mortgage interest, property taxes, student loan interest, etc. will help the middle class, but I will leave those for another time and another letter.
To be clear, no one who truly cares about the welfare of the middle class would object to tax reform that helps the middle class and small businesses, the two groups who do the most to drive the nation's economic engine.
What everyone should be watching out for and strongly opposing is any tax plan that favors big corporations and the one-percenters over the middle class taxpayer, who are the ones most in need of relief and the least likely to hoard their cash or put it into passive investments. What they are likely to do is go out and spend the extra money on goods and services, which in turn creates more demand, which ultimately leads to more jobs and the prospect of a better life for all.
William M. Checkvala lives in Grass Valley.