Davis Merritt: A checklist of GOP tax reform scams

So you’ll know how effectively the Republican Congress is moving to right the nation’s economic ship through tax “reform,” here’s a checklist of where the House-passed bill and the Senate’s proposal are headed.

▪ Increase the national debt by about $1.7 trillion: check.

(Whatever happened to the GOP’s deficit hawks? Could rabid debt aversion have been only an anti-Democratic talking point all these years of threatened government shutdowns?

▪ Expand the gap between wage-stagnated lower and middle-income families and the richest 1 percent: check.

(In 1980, the top 1 percent of adults earned, on average, 27 times more than the bottom 50 percent. Today the 1 percent takes home 81 times more than the bottom 50 percent.)

▪ Replay the three-card Monte scam of trickle-down economics by cutting corporate taxes and claiming that it will help everyone: check.

(It won’t, and never has on a sustained basis. For recent evidence, ask any Kansan.)

▪ Reduce “the world’s highest corporate tax rate” of 35 percent down to 20 percent: check.

(Few corporations pay even 20 percent now, and some major corporations pay no income tax at all.)

▪ Declare a tax holiday to encourage U.S. corporations with billions tax-sheltered overseas to bring it home, claiming that it will create jobs and raise wages: check.

(In 2005, the Bush-declared holiday brought about $300 billion back into the country at a 5.25-percent tax rate that saved the companies $3.3 billion. Fine for them. But the money didn’t create many jobs, and, in fact, the top 15 companies in the program reduced their U.S. employment by almost 21,000 jobs that year. Most of the money went to shareholders, to firm up some shaky balance sheets, to buy back shares — increasing company values — and for executive pay increases.)

▪ End the federal tax deduction for state and local taxes, making it more difficult for states, cities and counties to finance their obligations, such as schools and public welfare programs: check.

(This hits large — and mostly Democratic — high tax states with progressive tax philosophies particularly hard. It also, in effect, double taxes citizens in those states because they have to pay twice on a portion of their earnings.)

▪ Repeal the Johnson Amendment that bars 501(c)(3) organizations from overt political activity: check.

(This ensures that all charities, foundations and churches potentially become part of the grimy, near-criminal anonymous financing of political campaigns.)

▪ Make higher education even more expensive by taxing the tuition waivers that many universities provide to poor students and to graduate teaching and research assistants: check.

(That means students will be paying taxes on money they never actually see. For instance, a grad student with about $20,000 in income from teaching or research plus a tuition waiver at an elite university could wind up owing taxes on about $80,000.)

▪ Ensure that the initial, modest personal income tax cuts for some middle-income families expire in 2025, a baked-in tax increase even though the corporate tax cut would be permanent: check.

(The false assumption behind this: by 2025 trickle down will have made everyone able to pay higher taxes.)

▪ Oh, and along the way, gut the Affordable Care Act by ending the mandate that everyone must participate, meaning that 13 to 18 million people will move to the uninsured list: check.

Anything else we need from this Congress? Just ask.

This story was originally published November 21, 2017 at 10:18 AM with the headline "Davis Merritt: A checklist of GOP tax reform scams."