The Budget Resolution And The Tax Cut

The Republican Budget Resolution which just narrowly passed in the Senate and the House (had 20 GOP "no" votes) is a bunch of hooey -- a right-tard's wish list.  It's not law, not binding, just some radical recommendations to cut $1.8 trillion in discretionary healthcare and safety net programs, such as Medicaid, Medicare, SNAP (food stamps), SSI (income to the disabled), and the Earned Income Tax Credit for those with low incomes.  None of this is likely to occur to any significant degree.  It's too stupid.

But it succeeded in its real purpose.  Its passage changes the rules and allows the GOP to include its Tax Cut as part of the budget reconciliation, and thereby try to pass the Tax Cut with just 51 votes.

The Trump Tax Cut is a kleptocrat's wet dream.  The sugar goes to Big Business and ruling class wealthy individuals.  The rest of us get crumbs.

The main feature is a cut in the corporate tax rate from 35% to 20%.  It also eliminates the corporate alternative minimum tax.  Understand that literally no business currently pays 35%.  With allowable deductions, write-offs and loopholes, 70% of companies pay no corporate income tax, 20% of profitable companies had zero tax liability, and the effective corporate tax rate is about 16%. (Forbes, 4/20/16.)  Eighteen large, profitable corporations, including General Electric, PG&E, AEP, and Duke Energy, have paid no taxes for 8 years running. (CBS MoneyWatch, 3/10/17.) 

Slashing the corporate rate just lowers the bar, reduces the effective rate, and allows even more companies to pay even less.

The administration is claiming, incredibly, that the lower corporate tax rate will give the average American family an annual "raise" of $4000 to $9000!  Their bed-time story is that all these poor, overburdened businesses have been suppressing our "natural" incomes by that amount, due to taxes, and if we cut their rate they'll gladly just hand it over to us.  Now that is some trickle-down magical thinking!

On the individual side, the Trump Tax Cut has 3-4 tax brackets, with minor to non-existent rate decreases.  It increases the rate on the lowest incomes; it eliminates the deduction for state and local taxes paid; it eliminates the $4050 personal income exemption; it eliminates an unspecified "30%" of itemized personal deductions; it does away with the alternative minimum tax for higher incomes; it repeals the estate tax, which applies only to the very wealthy.

The Swamp Creatures are calling this a "middle-class tax cut."  It's not.  Not even close.  White House economic adviser Gary Cohn has said (without any evidence or proof) that it "could save $1000" for a family earning $100,000, which would allow them to "buy a new car or renovate their kitchen."  Put down the crack pipe, Gary!

The Trump Tax Cut is pure, bald-faced greed -- a self-serving gift to those who don't need one.  It will reduce federal revenue and increase the federal deficit by $1.5 trillion, and is therefore an exceedingly awful idea.  We need more revenue, not less. 

Senate Republicans couldn't muster the 51 votes needed in their rush-job to destroy Obamacare.  Now they're trying another rush-job on tax cuts.  Will there be enough Republican Senators of good conscience to scuttle this POS as well?