It is inconceivable to the GOP that “tax reform” will cause massive additional debt, provide relatively little to the middle class, force cuts to Social Security and Medicare, gut basic health care to the poor, make millions uninsured, and will constrain national defense expenditures — while greatly enriching the already wealthy.
And so it is with the GOP’s ever blind loyalty to trickle up economics originally ushered in by Ronald Reagan (who tripled the then national debt).
It is no coincidence that the top 10 percent hold 73 percent of all U.S. net worth of family assets, while the bottom 90 percent scrounge for the rest. Since 1987, the bottom 90 percent have seen practically no growth in their assets and income after inflation in 30 years and the top 1 percent grew by hundreds of percents.
If debt is OK to stimulate growth, then why didn’t we use lots of it during the big meltdown that hurt hundreds of millions of Americans starting in 2007?
Because it’s not about how much money there is. It’s about who it’s spent on. This truly is “harvest time” for the robber barons.
The magical growth fairy hawked by junior U.S. Sen. Dan Sullivan, R-Alaska, will not fill the gap. Federal tax reform is no different than his crown jewel, Alaska’s Senate Bill 21, and the cash giveaway in resource tax rebates.
Trump said, “This thing is going to cost me a fortune, believe me!” Trump himself gets about $20 million from the new law, and his family about $1 billion in total.
With $1.5 trillion added to the debt, mostly created by the 40 percent cut in corporate tax rates. Eighty-three percent of the benefits of the new tax law will go to the 1 percent.
The average middle class family will get $134 a month from “tax reform.”
But the damage has been done and realistically cannot be reversed. No matter if the House and/or Senate switch in 2018, it won’t be enough because of district gerrymandering, and a veto will stick.
Soon the drum beat will be that we can’t afford infrastructure spending unless we “reform” (aka cut) Medicare, Social Security and Medicaid. The real intended eventual result of “tax reform” is to force millennials to go after the older generation to fund themselves.
Trump, the GOP Congress, their wealthy donors, and their corporate benefactors dream of privatizing Medicare (and Social Security) that will double and triple health care and retirement costs.
No matter how much U.S. Sen. Lisa Murkowski is concerned about “freedom,” those who now won’t pay in under the prior mandate are going to show up at hospitals and clinics anyway, and the public will be forced to pay it all.
As to U.S. Rep. Don Young calling it “political bull-poop” if you don’t agree with his assessment, or anything else for that matter, well, he’s Don Young.
Soon many will figure out that charitable contributions (including for churches) and health care expense deductions are no longer really useable. While under the new law they remain tax-deductible they will effectively reduce “tax rate savings” one-for-one.
The increase in the standard deduction, and eliminating the personal exemptions (rather than increasing there), negates 90 percent of taxpayers actual use of those “tax-deductible” contributions.
By the way, corporate tax cuts were made permanent; those for individuals only last 10 years. Individuals will then be faced with having their taxes raised as debt increases explode — when corporate tax cuts actually caused most of the debt.
Warren Buffet put it best recently: “Between the first computation in 1982 and today (2017), the wealth of the 400 (richest) increased 29-fold — from $93 billion to $2.7 trillion — while many millions of hardworking citizens remained stuck on an economic treadmill. During this period, the tsunami of wealth didn’t trickle down. It surged upward.”
The majority of Trump voters will be just as much hurt by this as their needs get plowed under with “those others.” It’s consistent with having placed the fox in the henhouse. This is a big deal that will show its most forceful and negative effects five to 10 years from now.
• Anselm Staack is a CPA and an attorney who has been an Alaska resident for over 43 years. He was the Treasury Comptroller for Alaska under Gov. Jay Hammond and worked directly on the creation of the Alaska Permanent Fund Corporation.
