I had lunch last week with a friend of mine, the CFO of a network of Central Valley community health clinics. Naturally, the conversation turned to the Republicans’ fiscally irresponsible tax plan.
“This bill does nothing for us,” he said. “We’re a nonprofit. What do we care about taxes on pass-through entities, capital gains or the estate tax?”
How many of us are really concerned about increasing estate tax limits from “only” $11 million to $22 million? Or keeping Wall Street hedge fund managers’ tax rates at 20 percent, compared to 39 percent for everyone else who earns that much? Business owners like myself, and families throughout the Valley, have more pressing needs.
“What I’m concerned about,” I told my friend, “is being able to make a profit in the first place. More than anything, we both need healthy, trained and skilled employees, along with a little financial support so we can grow and expand our services to meet demand.”
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The GOP tax bill does very little to help any of us. Instead of offering subsidies or tax credits to provide employees with healthcare, job training or cutting payroll taxes (the largest tax American households pay), the bill focused on one thing – delivering a massive tax cut for the super-wealthy and corporations who already are raking in record profits.
The centerpiece of the plan is a massive, permanent reduction in the corporate tax rate, from 35 percent to 20 percent. Our Congressman, Jeff Denham, claims this corporate windfall will “trickle down” to the rest of the country by increasing employment and wages. History has shown, and everyone knows, that this is a myth.
Ronald Reagan even knew it, which is why he raised taxes three times after his tax-cut experiment resulted in enormous deficits.
I’m old enough to remember when our ballooning deficit mattered to Republicans – “fiscal conservatives,” they called themselves. This new scheme is going to cost $1.43 trillion over the next decade, all borrowed from China and paid for by our children.
The tax bill should have been an easy “win” for Republicans. Who doesn’t like the idea of lower taxes? It’s also the easiest way for politicians like Denham to remain in power. Give major benefits to your biggest donors, camouflage the long-term harm to voters with a short-term tax break, and keep on winning elections.
This time though, they overreached. The bill resulting from the combined House and Senate versions is an atrocity.
Many families might see a modest reduction in their taxes, but the cuts designed to benefit the middle-class will expire by 2025. Denham wants us to think it’s a great deal, claiming it will “create jobs and put more money in people’s pockets.”
If this tax bill was really about families, why wouldn’t the individual tax cuts be permanent and the corporate cuts temporary?
To help pay for cuts benefiting the wealthy, the bill eliminates the Affordable Care Act’s individual mandate – meaning struggling families will let their health insurance lapse. The federal government will no longer be obligated to pay their ACA subsidies. This will destabilize health-insurance markets and the cost of premiums will soar, offsetting much – if not all – of the temporary tax reductions given to average Americans.
It gets worse. The search for additional dollars to cover the cost of the tax bill and cries of “unsustainable deficits” gives Republicans a long-sought excuse to tackle Paul Ryans’ pet project of “entitlement reform” by cutting Social Security and Medicare. This will be a literal death sentence for many vulnerable seniors and the ill.
“Reform” is not exactly the word that comes to mind for such a betrayal.
Republicans in Congress passed this bill for the sole purpose of appeasing their donors. They’re banking on the hope that the great majority of people will be pacified by some modest tax cuts over the next few years, and distracted by the perpetual circus that is Trump’s Twitter account and his reality-show White House.
What this all amounts to is a con job, designed and endorsed by career politicians like Jeff Denham.
Our nation and our district deserve much better.
TJ Cox is a Central Valley engineer and small businessman and a candidate for California’s 10th Congressional district.