- EURASIAREVIEW.COM - A la une - 03/Jul 22:47

The Bad News In The Republicans’ Huge Bill – OpEd

The Republicans’ big tax and spending bill has all sorts of gifts – almost all of them for the rich. We will only know the full implications after we see the final bill that gets approved, but there are many things we can say about the version of the bill that passed the Senate. First and foremost, it amounts to another big tax break for the rich. The bill would increase the after-tax income for the richest ten percent of households by an average of more than $12,000 a year, according to the Congressional Budget Office (CBO). The bill also allows special tax treatment for “pass-through” businesses that are mostly operated by wealthy people in the financial sector. This provision will allow these people to be taxed at the 20 percent capital gains rate instead of the 37 percent rate they would pay on normal income. According to an analysis from the Yale Budget Lab, the estimated net effects of the Senate bill would deliver $118,630 to those in the top 0.1 percent, while the bottom 20 percent of earners would actually lose $560 a year. It also allows for the immediate deduction of capital expenditures. This means that if a CEO of a company buys himself a new private jet, they can fully deduct the cost on their taxes. Given that the Trump administration is also proposing to cut I.R.S. staffing in half, and has also eliminated the tax enforcement division at the Justice Department, the White House and Congressional Republicans are effectively putting up a huge neon sign saying “Taxes are Voluntary” for rich people. The bill covers the cost of these various tax cuts by reducing spending on Medicaid, the Affordable Care Act, and nutrition programs by over $1 trillion over the next decade. CBO projects that these cuts will reduce after-tax income for the poorest tenth of households by an average of $1,500 a year. It will also leave more than 12 million more people without health insurance. It is also worth noting how the bill achieves these cuts in Medicaid. The main mechanism is adding paperwork requirements which they know will be difficult for many families to comply with, leading them to be thrown out of the program. The bill will also add roughly $3 trillion to the debt over the next decade. This will leave us with annual deficits of between 6-7 percent of GDP. In the event the economy falls into a recession, Congress will be reluctant to support the sort of stimulus needed to restore full employment when the deficit is already at historically large levels. The bill also cuts the subsidies for electric vehicles and clean energy that were incorporated into the Inflation Reduction Act. This will have the effect of locking us into antiquated technology and putting us further behind China. Wind and solar energy can already be produced in China at costs far less than fossil fuel energy in the United States. Electric vehicles now account for well over 50 percent of car sales in China and are growing rapidly. This bill is a giant leap backward. It would be hard to envision a more destructive measure from Congress.