While you were asleep last Saturday, a piece of legislation passed in the senate that will alter the U.S. tax code drastically, and while this bill still needs to be amended to fi t with the house version before it becomes law, it is only a matter of time before that happens. In a move that has come to represent the highly corrupted nature of our federal government, the bill was introduced in the afternoon on friday without any real time for debate, let alone any to read it. The bill was passed 51- 49, with only a single republican against it, and the rest falling along party lines.
Senators Cory Booker and Elizabeth Warren reached out on social media showing the extent of the situation. The bill was drafted behind closed doors, and presented as a 500 page document with scribbled-on amendments in the margins. Given only a few hours to review the document, most senators did not have a chance to even read half the bill before it would be voted on. The democrats attempted to extend debate, but were shot down by the republican majority. Up until moments before the bill was passed, republican senators were voting to add several amendments to the already massive overhaul. There should have been a days-long debate. There should have been public scrutiny, but we got none of that. The passage of this bill is a moral travesty on the nature of its passing alone, but worse still is the content of the bill.
Among the many problems of the bill, of which there are just too much to even cover in one article, the bill primarily targets corporate and federal taxes. Put very simply, taxes across the board have been cut, but the vast majority of tax cuts will go to the very wealthy and corporations. Yes, you might have to pay marginally less taxes, but the corporate tax cut eclipses that entirely. The lowered tax revenue will remove necessary funding for vital social services, and it already pushes 13 million people off of public health insurance.
Additionally, state and local taxes, or “SALT” taxes, will no longer be tax deductible after a certain amount, so that extra tax break most people receive will be counteracted by less tax deductions. During the passing, several republican senators alluded to further cuts to social security and medicare. Cuts to essential services will hurt the middle-class and poor. This is all on top of the fact that the projected growth to the economy after the bill does not make up for any of the cuts, and that’s being generous to it.
Realistically, this will do far more harm than good. Any positive eff ects of the plan are predicated on the belief that the tax cuts will stimulate substantial growth and that “jobs will come back.” Herein is the major fl aw in the GOP and Trump’s romantic vision for a return to America’s economic golden days. Laissez faire economics did not make our economy strong. The period of unprecedented economic growth in this country happened at time when corporate tax rates were signifi cantly higher than they are now, and our economy has continued to grow, albeit slower. Emerging economic competitors like China and automation of industry have done more to pull jobs to other areas of the globe than anything we ever did to push them away. The global economy is substantially diff erent than it was then, and while the U.S. economy is still strong, the rest of the world has started to catch up.
There is far too much in the tax plan for me to cover here, and I am not equipped to give a point-by-point analysis of each provision in it, but there is a deeper philosophical problem with the ideology that shaped this legislation. We live in a globalized society now. The global market and democratic ideals have left the world a more open and cooperative place. New technology and the advancement of science have made certain types of work less demanding of labor, so there is no reason to artifi cially create jobs where there is no need for them. Better still to embrace new modes of production and new kinds of work. The reason so many are left impoverished and without work, is that we are holding on to notions about a person’s worth and its ties to their occupation that in time will no longer be relevant. We should embrace social welfare, shorter work weeks, and better pay not because of some pie-inthe-sky ideal, but because it is the only way we will survive. By giving tax breaks to the rich and taking away support for the poor, the republicans in congress show that they do not care about everyday people, or the future of this country.
Sources: Forbes, World Bank