GOP Budget and Tax Reform

GOP BUDGET AND TAX REFORM—GIVE TO THE WEALTHY, TAKE FROM THE MIDDLE CLASS

By Chris Hotchkin

Senate Republicans have recently passed a budget that paves the way for tax cuts, mostly benefiting wealthy Americans (the Sun Times headline:  “GOP tax plan gives the rick kids all the Halloween candy”) and potentially adding $1.5 trillion to the national debt over the next 10 years. The budget passed 51 to 49, with no Democratic votes in favor, and Senator Rand Paul as the only Republican voting no. The Republicans by-passed a potential Democratic filibuster through a process called budget reconciliation.

Now Republicans have released their tax plan. Their tax cuts would reduce the highest corporate tax bracket from 36% to 20% and Republicans seem to think this will create jobs, increase wages, and grow the economy, even though there is absolutely no evidence that this will happen. Experience tells us that when corporations and the wealthy are given tax breaks, the supposed “trickle down” in increased wages to workers never seems to actually trickle down. Another plank the Republicans are definite about is eliminating the inheritance tax, which affects only the very wealthy—those who would inherit more than $5 million.  Much of the rest of the plan—how it would affect middle class Americans –  is ambiguous. But the plan will take away deductions for student loans, medical expenses, state and local income taxes, and places a cap on how much mortgage interest deduction you can claim.

Republicans have not included Democrats in the planning and certainly have not been negotiating.  Democrats are concerned that we should not add to the national debt, and that we must have the ability to pay for Medicare and Medicaid. The Republican plan sets the stage for draconian cuts to Medicaid, Medicare, and even Social Security because it will add $1.5 trillion to the national debt.

Here is Senator Durbin’s response to the Republican plan:

“Make no mistake—what Republicans are trying to sell as tax reform is actually a massive tax give-away to the wealthy few, paid for with $1 trillion dollars in cuts to Medicaid and $470 billion dollars in cuts to Medicare. This plan does not fix our broken tax code or even simplify it. It cuts taxes for corporations and individuals who earn more than $730,000 per year, and raises taxes on the nearly one third of Americans who make between $50,000 and $150,000 a year. This has to stop. It’s time we looked at tax reform and economic growth in terms of the family room, and not the board room.”

Congressman Bill Foster has issued the following statement in response to the Republican budget resolution:

“The claim that the Republican budget will grow the economy and help the middle class is not based on facts. This budget will inflict hardship on millions of Americans while paving the way for tax breaks for millionaires and billionaires – tax breaks that history shows will not help grow our economy or create jobs. Instead, this budget would create unprecedented levels of government debt that would crowd out private-sector lending and destroy private-sector investments that create middle class jobs. The Republican budget would hurt Americans who rely on Medicare, while leaving $1.5 trillion more debt for our children to repay.”