Notes On The Tax Bill

Since the income tax was permanently established in 1913, the GOP's tax scam represents the first time ever -- ever! -- that a major tax overhaul will be passed and signed into law without a single vote from the minority party.  "Partisan" doesn't even begin to describe it.

The last big tax bill was the Tax Reform Act of 1986.  It was a bipartisan effort first proposed in 1984.  It took over two years of hearings and debate before becoming law.  The current one-sided scam took the GOP a month and a half.

The 1986 bill ended tax deductions for most loan interest, e.g. auto loans, personal loans, credit card interest.  But it preserved tax deductions for home equity/second mortgage loan interest.  As a result, and with strong encouragement from the banking industry, American borrowers flocked to tax-deductible home equity credit lines as a means of financing damn near anything.  The tax write-off was the big incentive, but now it's been eliminated.  Home equity financing is no longer tax deductible.  At its peak in 2009, Americans owed $674 billion in home equity debt.  Post-crash, that amount is down somewhat, but there are still a whole lot of people with a whole bunch of home equity debt who now get zero benefit for it.

PolitiFact combined the analyses of the Congressional Joint Committee on Taxation and the Tax Policy Center and found that under the new tax scheme, the average household in the middle income quintile (i.e. middle fifth) earning $60,000 a year will see a $900 annual tax cut.  Lower incomes get far less.  The average tax cut for the top quintile will be $7600.  For the top 1% of earners get an average cut of $61,000, and the top 0.1% get an average $285,000 cut.

"With $17.31 a week, you could put a laser on the moon!"

Next year, as that average middle income household closely examines its paycheck (as giddily recommended by Ways and Means Chair Texas Rep. Kevin "Dr. Evil" Brady this morning), they'll notice an increase of $17.31 a week.  Yippee, Skippy! 



On the corporate side of this scam bill, if you believe big businesses, from the goodness of their hearts, will be sharing their huge tax cuts by bestowing big pay raises upon their workers, check former NYC mayor and famous rich guy Michael Bloomberg's quote:

"CEO's aren't waiting on a tax cut to 'jump-start the economy' -- a favorite phrase of politicians who have never run a company -- or to hand out raises.  It's pure fantasy to think that the tax bill will lead to significantly higher wages and growth."