How Do GOP Tax Proposals Hurt Your Bottom Line, Mr. President?

December 3, 2017

The U.S. Senate and House of Representatives passed separate, non-identical bills calling for massive tax cuts for both corporations and people (yes – corporations are not people). The jubilation over success in this endeavor, while not yet a completed and signed law, almost overcame the negative vibes last week provided by the Michael Flynn indictment/ guilty plea to a charge of lying to federal agents concerning the current investigation to possible collusion between the Trump campaign and the Russian government regarding the latter’s alleged attack on our 2016 Presidential election to aid in the surprise victory of Donald Trump over Hillary Clinton.

These bills could potentially be the biggest tax cuts in this country in decades. One major problem with them is that the vast majority of the gains would be felt by large multinational corporations and the very wealthy among us. Another is that all estimates show a resultant 1 to1.4 trillion dollar addition to the deficit and national debt. Unfortunately, our President and his Congressional enablers are spinning the cuts as the best thing since the invention of predatory crony capitalism. As has been the practice of tax cutting Republicans from days of Ronald Reagan, the supply side economists claim that revenue reductions resulting from the tax cuts will be made up by the boost the additional money gives the economy as corporations invest their windfall into improvements in their corporations. Money that had been held offshore and outside of the country to avoid taxation here will be brought back to further boost the economy here. Trickle down to workers in the form of wage increases would leave everyone better off.

None of these claims is new. What would be new would be if any of this pie-in-the-sky stuff ever actually happened as promised by the snake oil salespeople favoring their implementation. Didn’t happen under Reagan, who cut taxes at the top while radically increasing military spending. While running against Reagan for the GOP Presidential nomination in 1980, his future Vice President and ultimate successor, George H.W.Bush, called the philosophy “Voodoo Economics” – implying it depended on smoke and mirrors and otherwise magical stuff in order to be adequately explained to us mere mortals. Math couldn’t do it then, nor has it succeeded now.

The GOP seem to forget totally about their normally vehement abhorrence of deficit spending when they have control of the executive and legislative branches and decide to embark on one of these schemes. They lower taxes, primarily benefitting those at or near the top of the economic ladder, while throwing scraps to workers and those in the middle or near the bottom to make it seem like everybody is benefitting through their economic wizardry. The actual result ends up being even more wealth concentrated in fewer hands, with opportunities for economic advancement even more restricted to the vast majority of us. Dissatisfaction with the failure of reality to achieve the high expectations raised by the purveyors of these policies eventually results in either taxes being raised again (as little as possible on corporations or the wealthy}, election of politicians with opposing views to replace and try to fix the problems resulting from the supply side economic policies, or both.

History has shown us in past renditions of this scenario that the ultimate goal is to rob the vast majority of us of what little wealth remains after the oligarchs use their control of the government to reverse any progressive gains that may have been made in the way of improved education, availability of good health care, reduction of poverty, etc. Bernie Sanders and others have predicted when this house of cards starts falling down, which it will, the first things that will be attempted, prior to raising taxes, will be to attack the social safety net as being too expensive. Hence, the attempts to dismantle the ACA rather than improve it as many of us would prefer. Next would come programs such as Medicaid, Medicare and Social Security. They’ve already shown a willingness to let children do without needed health care by their bungling of CHIP funding (though I probably shouldn’t call it bungling since it was intentional).

Donald Trump appears to either have been totally blowing smoke or deliberately lying when he was promising to improve the economy for the working people of this country during the 2016 campaign. He still talks up a storm when describing how great this scheme will be for all of us – except, of course, Donald J. Trump and his fellow billionaires. There are probably a myriad of reasons why he has steadfastly refused to make public his own past tax records. They boil down to a general desire to keep us all in the dark with regard to how he makes, earns, steals or whatever it is he does to become and stay so rich. the secrecy also makes it difficult for anyone to do an accurate analysis of what he means when he says that the proposals made to this point would definitely NOT improve his financial bottom line.

Donald Trump’s financial ethics have strained public credulity since it became apparent he had no intention of following the precedents of prior wealthy holders of his current position regarding not using his position to benefit unduly financially from being President while in office. Sure, they all seem to make money after leaving, but he keeps getting taxpayer money thrown at his businesses – be it from the need for added security at many locations he and his family frequents and are owned by his companies, or by foreign entities wishing to curry favor by staying in a hotel he owns or that has his name attached to it. Divestment or use of a blind trust to allay the appearance of corruption on his part have been accepted practices by his predecessors, but are beneath his dignity.

When Trump claims he is being hurt by the proposed changes, there is one factor alone which makes his claims seem ludicrous in the extreme. Eliminating the inheritance tax, which only affects the wealthiest of the wealthy, would save his heirs an estimated amount of somewhere in the area of a billion dollars. Ensuring that a man who was born rich, inherited millions from his father and enjoyed the unearned benefits automatically bestowed on anyone possessing them is allowed to perpetuate that inequality of wealth and privilege by providing the same to his children and their children and so on ad infinitum is not something a society espousing egalitarian ideals and democracy should be aspiring to emulate. Trump acts like he is owed more from our society than the rest of us because of what he has, not what he has done.

Congress seems happy to go along with him in this current rendition of trickle down mania tax cuts. It suits their moneyed donors and helps make it easier for them to stay in office. The resultant policy will also help most of their bottom lines financially as well. Calling Congress a millionaires club may be an exaggeration, but not by much. The policy will not work as advertised. Never has, never will. The pattern will follow that of Reagan and the Bushes. How many of us can say the economy is appreciably better now than it was for their parents or grandparents? Sure, progress gets made, but there is always foot-dragging and attempts made to reverse that progress. Look at what Sam Brownback has managed to do in his tenure as Governor of Kansas with a rightwing GOP dominated legislature. I haven’t heard clarion calls for his nomination to be our next President – certainly not by the residents of his own state. Catering to the whims and wishes of the elites and big business may be a way to gain and maintain a modicum of political power, but it is no way to govern in a democracy.

I am not trying to put down all wealthy people because they are wealthy, but find many of their arguments that they somehow earned and deserve to maintain that degree of wealth in light of the degree of human suffering caused by such inequitable policies and economic systems insulting. This is particularly true when dealing with someone who has done nothing to go out of their way to improve the lives of anyone outside of their limited social circles or even immediate family. Our government needs to be by, of and for each and every one of us, not merely those who managed to accumulate enough wealth to buy whatever they want whether or not they harm others in the process. The people occupying elected offices in Washington and the various state capitals need to keep this in mind.

Further Suggested Readings:

If You’re Against the Tax Plan, You’re a) in the Majority, and b) Not a Congressional Republican

Opinion | Apparently Republicans want to kick the middle class in the face

Republicans insist tax cuts will benefit workers, but CEOs have other plans

Are You In One Of The 36 Million Families Whose Taxes Will Go Up Under the House Bill?

Here’s How You Can Take Urgent Action to Defeat the Republican Tax Bill

Senate OKs tax bill as Trump, GOP near big legislative win

GOP Tax Bill: Major Battle Lost in War Between Top Down and Bottom Up

The US Senate tax bill: The financial oligarchy on the rampage

Kim Jong Un Fears That G.O.P. Tax Bill Makes His Plan to Destroy the U.S. Redundant

It Started as a Tax Cut. Now It Could Change American Life.

Bloomberg Just Caught CEOs Bragging About Trump’s Dirty Tax Plan Secret