Tag Archives: tax bill

Shamelessness And The Tax Bill

Jennifer Rubin is a conservative columnist. Like many of the pundits on the political Right–and unlike most GOP members of Congress– she is intellectually honest. (Here in Indiana, Paul Ogden falls into that category; I often disagree with his conclusions, but I have a high degree of respect for his intellectual integrity.)

Rubin doesn’t mince words about the GOP’s single legislative “accomplishment.”

Republicans will knock a giant hole in the budget with a tax cut of $1.5 trillion, most of which goes to the rich and corporations. Rather than acknowledge their hypocrisy on the debt, they choose to misrepresent the facts.

She then provides a couple of examples, one an exchange between George Stephanopolous and  Mitch McConnell, and one between Senator Susan Collins–ostensibly the Senate’s only GOP moderate–and Chuck Todd on Meet the Press. Forgive the length of this quote, but I think it is important not to summarize or characterize.

CHUCK TODD: Alright, if the debt is unsustainable at $14 trillion, how do you, how did you make yourself comfortable voting for something that’s going to increase the deficit? This tax bill we’re at 20.6 trillion now and the best estimates saying it’s going to even the best estimates of dynamic scoring that we could still find still add half a trillion dollars to the deficit.

SEN. SUSAN COLLINS: Economic growth produces more revenue and that will help to offset this tax cut and actually lower the debt.

CHUCK TODD: Where’s the evidence? Where, explain to me. Find a, find a study that actually says what you’re claiming.

SEN. SUSAN COLLINS: Let me–

CHUCK TODD: It doesn’t exist.

SEN. SUSAN COLLINS: Let me do that. First of all if you take the C.B.O.’s formula and apply it four to four tenths of one percent increase in the GDP generates revenues of a trillion dollars, a trillion dollars. Even the joint committee on taxation has projected that the tax bill would stimulate the economy to produce hundreds of billions of additional revenue. I’ve talked four economists, including the Dean of the Columbia School of Business and former chairs of the councils of economic advisors and they believe that it will have this impact. So I think if we can stimulate the economy, create more jobs that that does generate more revenue.

CHUCK TODD: But why isn’t there a single study? I’m going to show you three studies that we have, sort of a liberal one, a centrist one, and a conservative one right up there. The most conservative one, the most pro-economic growth argument, still adds $516 billion to the deficit over ten years.

SEN. SUSAN COLLINS: Well, talk to economists like Glenn Hubbard and Larry Lindsey and Douglas Holtz-Eakin, who used to be head of the C.B.O. And they will tell you otherwise. So I think you will find that economists just don’t agree on this.

Jennifer Rubin then did what credible reporters do; she contacted the quoted economists, who told her that they had not made the statements Collins attributed to them. Both Hubbard and Holtz-Eakin said they’d told Collins that the measures would “offset but not eliminate the static budget loss.”

After confirming that even conservative Republican economists deny that the tax cuts will come close to paying for themselves, Rubin writes

This raises the question as to whether Collins and McConnell misunderstand the advice they get, choose to cherry-pick what they are given or simply don’t want to fess up that they’ve abandoned fiscal sanity in search of a political win and to soothe donors. The most generous interpretation is that they are operating with unsupportable optimism that these cuts will do something no other tax cuts have ever done– pay for themselves.

They didn’t “misunderstand.” They’re shameless and they’re lying. As Talking Points Memo reports, economists and former government officials all predict the bill will drive up the federal deficit, shrink and destabilize the health care market, make our already historic income inequality worse, and–worst of all–give Congress cover to do what Paul Ryan and his ilk have long wanted to do:  make deep cuts to the social safety net and government programs.

I’ve said it before: I don’t know how these people sleep at night.

 

 

 

Sabotaging Clean Energy

Every day, we learn something new and horrible about the GOP tax bill.

According to the Environmental Defense Fund, the bill is likely to derail the nation’s encouraging move to clean energy.

Both the measure passed by the House and the more recent Senate version deal what the organization calls “devastating blows” to America’s booming clean energy industry—while (I know this will absolutely shock you) retaining the billions of dollars of oil, gas and coal subsidies in the current code.

According to the “alert” sent out,

The Senate version that passed in a frenzied vote early Saturday morning includes a “poison pill” that essentially ends the tax benefits gained by investors in clean energy—killing what has been a primary driver of the industry’s growth for decades. And the House version takes aim at incentives that have catalyzed wind energy investments, meaning wind developers in the middle of projects and counting on those credits will have the rug pulled out from under them. They will have to pay the costs themselves or abandon their projects.

As Environment Florida reported,

The bill also continues massive incentives for fossil fuel production amounting to tens of billions of dollars over the next decade. Most insidiously, an obscure provision recently added to the Senate Tax bill would stifle development of solar and wind energy by hurting the financial viability of new projects. With no public debate or time for Americans to respond, the Senate is threatening one of the keys to a livable future for our children and grandchildren.

The House tax bill isn’t any better. It also continues subsidies for fossil fuels, eliminates incentives for electric vehicles and slashes wind energy credits by at least one-third.

Lest we attribute these analyses to over-reaction by environmental organization, an in-depth analysis from the New York Times confirms that the tax bill contains an all-out assault on renewable energy.

I suppose we shouldn’t be surprised by this; the Trump Administration is a collection of climate change deniers. Scott Pruitt and Ryan Zinke have longtime ties to fossil fuel interests, and neither has bothered to hide his contempt for environmentalists. Or, for that matter, science and scientists.

Mother Jones highlights yet another environmental assault, in “The Environmental Disaster Tucked Into the Tax Bill.” That measure would allow drilling in the Arctic National Wildlife Refuge.

“The Arctic National Wildlife Refuge is one of the crowned jewels of our public lands,” Ana Unruh Cohen, the director of government affairs at the Natural Resources Defense Council tells Mother Jones. “Drilling there would totally mar this beautiful place.”

Opening up the 1.5 million acres for drilling is estimated to generate $1.1 billion over the course of a decade, according to the Congressional Budget Office, and would provide a big fiscal windfall for the state of Alaska. Environmentalists, however, are appalled: they point out that the site is a critical habitat for hundreds of animal species, including foxes, polar bears, and caribou, and those habitats need protection.

Drilling would also threaten sacred lands for the Native Alaskan Gwich’in tribe.

Just for good measure, environmental groups charge that other provisions in the bill will wipe out polar bears. I don’t know what Republicans have against polar bears.

For a bill that is supposed to be all about tax reform, we keep finding all sorts of unrelated assaults–on the environment, on women’s reproductive rights, on Church-State separation…this bill is a Christmas gift to the rich and the crazy, two constituencies with a considerable amount of overlap, and the rest of us will be paying for it.

So will our grandchildren.

If You Thought Citizens United Was A Travesty…

Wait until you get a look at the full impact of the “tax reform” embraced by a Senate filled with servants of Big Money and the rabid, white nationalist GOP base.

Among the many unconscionable deals cut in order to round up the necessary 50 votes was a gift to the Christian far right that I’d suggest filing under “be careful what you wish for.”

According to a guest column in that noted leftwing publication Religion News Service (that’s sarcasm, for those of you who might be literal-minded), the tax bill’s repeal of the Johnson Amendment–a repeal much desired by Trump-supporting fundamentalist churches–will inevitably lead to government regulation of churches.

Partisan politics do not belong in church pulpits or in nonprofit offices. This isn’t just common sense, but part of the tax code. The Johnson Amendment says that 501(c)(3) nonprofits, including churches, cannot endorse or oppose political candidates.

The tax bill initially passed by the House exempted churches from the amendment, but at the last minute, the measure was amended to exempt all 501 C3 organizations. According to the Religion News Service analysis, this will not only cost taxpayers billions of dollars, it will end up “dragging nonprofits away from their charitable missions and into the undrained, partisan swamp.”

It is telling that every major nonprofit coalition has lobbied against repeal. More than  4,500 nonprofits have signed a letter to Congress asking that the rule be protected.

As the article points out, tax exemption is a privilege, not a right–if churches want to engage in political activities, they are free to do so now; they need only relinquish their tax exemption. After all, political donations shouldn’t be “laundered” through religious or nonprofit organizations; preventing that was precisely the reason for the Amendment in the first place. But these churches want to eat their cake and have it, too.

The havoc that would be wrought by repealing the Johnson Amendment would make Citizens United look like the golden age of American democracy. Permitting tax-exempt churches to engage in partisan politicking would throw untold millions — even billions is no exaggeration — of dark money into U.S. elections. Right now, all 501(c)(3) organizations except churches and church-related charities file annual tax returns, the detailed Form 990, with the IRS. Every penny donated and every penny spent is tracked. But churches file nothing. They are exempt. They are financial and informational black holes.

So if the Johnson Amendment is repealed, any megadonor could write the nearest megachurch a check of any size and take the tax write-off. The pastor gets the check, takes his cut — a tithe, so to speak — and spends the rest on politicking. Churches would become super-PACs. All in the name of religious freedom.

Only the most naive policymakers and proponents of repeal could possibly believe that this situation would be allowed to continue unabated.

Trump, Ryan and other opponents of the rule are shortsighted, especially if religious freedom is the true goal. Imagine for a moment that they get everything they want. Churches become unregulated, unaccountable, opaque super-PACs. Regular PACs start reorganizing as churches because their donors have suddenly found tax-deductible Jesus and fled.

This scenario is unsustainable if our democracy is to survive. At some point, the government will be forced to regulate churches: financial disclosures, donor disclosures (including even regular parishioners and tithe-givers), IRS filings, FEC filings — the regulatory list will be long and onerous. Churches will get money, power — and invasive government regulation to match….

A vote against the Johnson Amendment is a vote for church regulation. Surely that’s not something the party that has proclaimed itself the champion of religious liberty intended. But that’s what happens when a reality TV show host dictates tax policy as a way to thank his zealous supporters. The law governing churches’ involvement in politics might change, but the law of unintended consequences will not.

We aren’t just living in an age of corruption–we’re living in an age of idiocy.

The More We Learn, The Less We Like

The GOP tax bill has cleared another hurdle, and appears to have momentum–there are even reports suggesting it will be voted on today. Those of us hoping that at least two or three Senate Republicans might put the interests of the country above those of their party are likely to discover that those principled Republicans don’t exist.

Every time I discover something new about this abominable bill, it gets worse. So far, I’ve come across no redeeming features of this obscene and economically destructive proposal.

The latest “discovery” comes courtesy of Dispatches from the Culture Wars.

Republicans love to tell us that if the government would just stop providing a social safety net, churches and charities would step in and everything would get better. But a study of the new Republican tax “reform” bill says it will reduce charitable giving by up to $24 billion a year.
It’s hard to tell whether this nasty little surprise was intentional–I rather doubt it, since the entire bill displays incredible ignorance of how the economy really works. (If anyone supporting this giveaway to the rich really believes it will create either jobs or prosperity, that would be the ultimate triumph of hope over experience.)
As any economist or tax lawyer will affirm, many–perhaps most– of the provisions in the IRS Code work a lot like the balloons used by the guys making them into animals at fairs and festivals–squeeze here, and it gets bigger there. As the referenced study found,

Even though the House version of the Tax Cuts and Jobs Act (TCJA) preserves the charitable income tax deduction, other income tax provisions of the bill could reduce charitable giving by between $12 billion and $20 billion in 2018, based on new estimates from the Tax Policy Center. A second provision—repeal of the estate tax—could reduce giving by another $4 billion in the longer run.

By nearly doubling the standard deduction and either repealing or scaling back most itemized deductions, the House version of the TCJA would substantially reduce the number of taxpayers who elect to itemize. TPC estimates that fewer than 13 million taxpayers would itemize deductions in 2018 under the House version of the TCJA, down from more than 46 million under current law.

It would be lovely if everyone making a charitable contribution was motivated purely by concern for whatever cause their dollars are supporting. (If you do believe that, I have some swampland in Florida to sell you…) Even generous givers, however, are conscious of the tax incentives involved. When the effective cost of a donation is less, it’s easy to give more. This tax bill reduces that incentive by increasing the after-tax cost of giving by about 8 percent.

This troubling result is less obvious from the face of the bill than several of the other consequences that have been highlighted: the 1.4 trillion added to the deficit, severe automatic cuts to Medicare, making graduate school unaffordable by taxing tuition supports as income (or, for that matter, making all college educations less affordable by removing the deduction for interest on student debt.) It goes on and on.
We are living with an American government that reserves its favors for the “haves” while doing steadily less for the “least among us.” The people getting the short end of the stick are going to depend to an even greater extent upon the charitable organizations that are already stretched well beyond their capacities– organizations that are demonstrably unable to fill the considerable gap between what poor families need to survive and what they earn.
It’s going to get very ugly.
On the other hand, you will still be able to deduct the expenses for your corporate jet….

How Stupid Do They Think We Are?

I really wasn’t going to write any more about the GOP tax plan, at least until we’ve seen whether it is likely to pass in anything like its current form. But I was on the treadmill yesterday morning and, as usual, was watching television to take my mind off the fact that I was exercising. I was absolutely astonished to see a political advertisement touting the tax plan’s benefits to “ordinary middle-class Americans,” who would see an “average” tax saving of over 1,100.

The voice-over went on to reassure listeners about the fairness of the measure, asserting that the tax brackets for the rich weren’t being lowered, and implying–without actually saying it– that the tax liability of the top 1% would not decrease.

The blatant dishonesty of this ad appalled me.

Let’s just examine that bit about the “average middle-class taxpayer.” (Ignore, for the moment, the fact that Congressional Republicans at one point defined an annual income of 450,000 as “middle class”–I don’t know whether the criticism that little item generated has caused them to back off that particular bit of nonsense.) Let’s just talk about averages.

What’s the average of a mouse and an elephant?

More to the point, if my income is “averaged” with the income of Bill Gates, the resulting number is going to be pretty misleading about both of us.

Every analysis I have seen–even those produced by right-leaning think tanks–shows wealthy individuals getting the lion’s share of the tax “relief” under both the House and Senate  versions. According to Politifact,

  • The highest-income 0.1 percent of taxpayers — those who had an income of over $3.7 million in 2015 — would get an average tax cut of more than $1.3 million in 2017.
  • That same group would receive 18 percent of the tax reduction, while the bottom 60 percent of taxpayers would receive 16.4 percent of the reduction.

Credible sources analyzing the plan’s consequences quibble on some of the details, but all of them agree on two points: the cuts disproportionately benefit the rich, and they will add somewhere between 1.5 and 1.7 trillion dollars to the current deficit.

A deficit of that magnitude would be unsustainable, and the result would be savage cuts in social welfare programs like Social Security, Medicare and Medicaid. (Those cuts, of course, would come later–In the time-honored practice of politicians everywhere, the bill pushes the most noticeable negative consequences to a future election cycle.)

I was flabbergasted at the out-and-out dishonesty of the television spot. I’ve seen plenty of spin, but this went far beyond that–it took flat-out lying to an entirely new level. The extra adrenaline probably improved my workout, but all I could think of was “how stupid do the people who created this ad think Americans are?”

And then all I could think about was, what if they’re right?