As of Tuesday, December 5, 2017
In the early hours of Sunday morning, the U.S. Senate overcame its last big hurdle and passed its version of the most significant tax reform in 31 years by a 51-49 vote: 479-pages of a brand new tax law.
If you are wondering exactly what is in it, call your Senator.
Presumably, they can answer any questions you may have, providing they can read the handwritten scribbles in the margins of the document that was passed and have, in fact. actually read it, which is very unlike given its late-night revisions and adoption.
But don't call too early, the fat cats in Washington will be dozing in the sun the way cats do.
Speaking of cats, chances are taxpayers will be coughing up hairballs for some time to come as their grandchildren wait for the corporate savings in the legislation to “trickle down” into the real economy, but Americans should be used to that: We saw just this sort of single-party, late-night adoption of important legislation not so long ago with the Affordable Care Act that no one can actually afford.
They didn't get it right then, and they aren't getting it right now — never mind that the Democrats orchestrated the first song and Republicans the second.
What does the new legislation mean for American taxpayers?
The work is not technically done, as the House and Senate must agree on a bill and there may be some sticking points. Yet the way is clear for passage of a $1.5 trillion tax cut package, which means the federal government will either be cutting $1.5 trillion from the budget or adding $1.5 trillion to the deficit. All of this, just in time for Christmas!
Is that too simplistic an analysis? I don't think so.
The ACA was presented by Democrats as being “health care for all,” and it was pretty clear that “health care for all” was and is an expensive proposition. Convoluted mathematics and legislative maneuvering didn't change that simple truth, promises aside.
Even without the massive waste (and probably corruption) that we now see coming to light in Oregon's own healthcare rollout, the program is flawed.
We would have been better to have had a bipartisan approach to what is a serious and long-standing issue, i.e., that many Americans lack adequate health care.
The Republican tax cut is also filled with convoluted mathematics and legislative maneuvering designed not to improve the tax code but to allow the Republican party to cut taxes without a single vote from the opposing party.
How is it that Congress is taking us down this path?
Tony Nitti, a contributor to Forbes magazine and an analyst focused on tax policy, court decisions and planning opportunities, described the inner workings of our illustrious Senate as they moved to passage:
“Regardless of your political affiliation or opinion of the proposed tax plan, you should be mortified by what took place over the past two weeks in the Senate. First, Senate Finance Committee Leader Orin Hatch neglected to publish legislative text of his proposal until Nov. 21. At 515 pages, this was no light read, yet the Finance Committee was somehow familiar enough with its contents to vote to move the bill forward a mere seven days later.”
On Saturday night, things got even more convoluted, Nitti writes:
“On the Senate floor, things went from shady to sham rather quickly. First, a list of possible amendments was handed out around Capitol Hill, but only to lobbyists, rather than journalists.
“Then, after a flurry of 11th-hour bargains were made to nail down the final few wavering Republican Senators, the final version of the bill was made available in the dead of night, and was voted on before you awoke.
“Even more embarrassing was the state the text of a bill that will shape our economy for the next decade was in, as it was complete with — and I'm not making this up — key amendments and alterations hand-written into the margins.”
The legislation from House and Senate will be “reconciled” and made into law by Christmas.
— Mark Gibson
It is hypocritical for Democrats to wail over Republican reform of the tax code adding $1 trillion to the soaring deficit over a 10-year period when former President Barack Obama added $10 trillion during his eight years in office, which they excused as necessary to fix the economy.
However, it is nice that Democrats are finally acknowledging that the federal government has a spending problem. Although the Congressional Budget Office has been notoriously wrong (and partisan) on many of its projections, it is ridiculous that Washington, D.C. will rake in more than $40 trillion over a decade and yet our deficit now tops $20 trillion.
More than 135 economists have lauded the Republican tax cuts, saying they will bring business growth and create more jobs and higher wages.
According to data from the IRS and reports from the nonpartisan Tax Foundation, the House bill will lead to the creation of 12,358 jobs in Oregon. The bill implements a new lower 9 percent tax rate on the first $75,000 of net income for active small business owners earning less than $150,000 through their enterprise. The bill also lowers taxes on small business investment by creating a new 25 percent rate.
Republicans in both chambers want the corporate tax rate at 20 percent instead of 35, which is the highest in the world. Their thinking is that Google, Microsoft, Apple, Pfizer and Dell and other big companies will bring business back to the U.S. from countries that offer a better rate.
Currently, Canada’s corporate rate is 15 percent, Japan’s is 30 percent and Ireland is 12.5 percent. Switzerland has the lowest rate among developed nations at 8.5 percent.
America’s middle class will gain from Republican plans to almost double the standard deduction. In addition, the tax credit per child will increase by at least $600.
Democrats and their media allies are furthering their class warfare agenda by claiming that only the wealthy will benefit from the Senate and House tax plans that must now be reconciled into one package.
How does inspiring job growth of nearly four percent hurt the poor exactly?
And how can Democrats even pretend their war on the rich is working, given that companies have been fleeing America’s ridiculously high tax rate for years — and won’t return unless something changes?
The fact is, this move by Congress transfers wealth from rich blue states to less rich red states. It also moves wealth from high-income, childless homeowners to less-wealthy folks with kids. Under the House plan, a typical middle-income family of four, earning $59,000 (the median household income) will receive a $1,182 tax cut.
Sure, the wealthy who pay most of the taxes in this country, will get a large sum of money as their share of the cut. It is likely they will invest those savings into business ventures, or support of charitable causes and the arts, which will benefit all of us.
President John F. Kennedy rightfully said, “A rising tide lifts all boats” and America has needed tax reform for a long time. The plan will not be perfect — none are — and I agree with critics who say it doesn’t simplify the system enough, but it is necessary. The last time there was a significant overhaul of the tax code was under was Reagan’s administration in 1986.
Even tax-happy Democrats should acknowledge that the U.S. economy lost much ground under Obama’s reign. He was the first president in history to never achieve a single year of Gross Domestic Product growth of 3 percent or higher.
Although tax cuts could help in the immediate, the best way to maintain a healthy economy is for our government to stop spending more money than it takes in.
Social Security has been running deficits of tens of billions of dollars annually since 2010, with projected deficits in the trillions for decades to come. We have the same problem with Medicare.
We must change our spending habits, or we’ll end up in the same insolvency mess as Greece. It is unfair to foist that burden on future generations.
— RaeLynn Ricarte