Haglund: Tax bill is another 'tax giveaway to the rich'
According to a headline in The Hill, Republicans are worried their tax bill will be viewed as a tax giveaway to the rich. Some such as Sen. Richard Shelby, R-Ala., think this is the way it should be. As he said, "People with money save money, cre...
According to a headline in The Hill, Republicans are worried their tax bill will be viewed as a tax giveaway to the rich. Some such as Sen. Richard Shelby, R-Ala., think this is the way it should be. As he said, "People with money save money, create jobs, create risk. People with no money create nothing." In other words, if you aren't rich your life produces nothing of value - you have created nothing so you don't deserve a tax cut.
Every time they propose tax cuts for the wealthy they trot out the same three examples of faulty logic.
• Just as Reagan and Bush II did, the Trump administration has argued that "tax cuts are necessary to stimulate economic growth." By this logic the huge economic boom that followed World War II should never have happened because the top tax rate then was 90 percent. Also, when Bill Clinton proposed a tax hike to balance the budget, Republicans were almost unanimous in saying his plan "will raise taxes, increase the deficit, and kill over 1 million jobs." Instead, the economy had a greater average GDP growth per quarter than under Reagan, job gains averaged 242,000 per month and there were several years of budget surpluses.
• A Trump spokesperson recently stated, "Tax relief in this package is focused on middle-class families." As usual, the Republicans design a big tax break for their wealthy friends, throw in a few crumbs for the middle class, and then proceed to talk only about the middle class. For the wealthy, the tax bill eliminates the estate tax, reduces corporate taxes from a maximum of 35 to 20 percent, and eliminates the alternative minimum tax which insured that the wealthy pay at least some tax on their income. The middle class may be helped some by changes in the tax brackets and doubling the standard deduction but will lose the personal exemption, deductions for state and local taxes and medical expenses, and there will be caps on the deductions allowed for mortgage interest and property taxes. There is talk of cuts to Medicare, Medicaid, Pell grants and housing assistance to help pay for the tax cuts.
• Trump and other Republicans have stated that their plan to reduce taxes on the wealthy will "cause them to hire more workers and raise their wages." This is just the latest iteration of trickle-down economics. This Republican policy failure has resulted in 40 years of wage stagnation for workers. Pew Research concluded that after adjusting for inflation, today's average hourly wage has just about the same purchasing power as it did in 1979. This has resulted in massive wealth inequality with the top 10 percent of families - those who had at least $942,000 - holding 76 percent of the total wealth, according to CNN Money. The bottom half of our population owns only 1 percent of our total wealth.
The Republican goal of transferring another $1 trillion from working people to the uber-wealthy and adding at least $1.5 trillion to the national debt should be soundly defeated.
Haglund lives in Moorhead.