Tags: tax reform | lobbyists | corker

The Great, the Bad and the Ugly of the Tax Reform Bill

The Great, the Bad and the Ugly of the Tax Reform Bill
Sen. Bob Corker (R-TN) talks with reporters in between votes at the U.S. Capitol December 1, 2017 in Washington, D.C. (Chip Somodevilla/Getty Images)

By
Monday, 18 December 2017 10:17 AM Current | Bio | Archive

The primary concern of Take Back Our Republic are the special interests trading political contributions for your tax dollars. This week’s tax reform, in a critical CNBC report, reveals data that super rich New Yorkers are the only group in the country who will see a tax hike; while everyone else gets a tax cut under this bill.

So let’s start with the great part of this tax reform; then once again show how lobbyists changed things. Changed into what could have been a great bill, if kept simple, into a bill with a lot of bad and ugly included.

Tax Bill — The Great

Ironically, if you click through the actual CNBC data behind their vicious and hyper deceptive headline "GOP Plan Would Stick Millions With Bigger Tax Bills," you may reflect on the fact that their headline would technically be accurate if the tax bill gave 2 million Americans a tax hike and gave the other 120 million a tax cut.

CNBC’s great research lets you click on all 50 states and D.C., and then look up the income group you fall into (the Richest 1 percent, Next 4 percent, Next 15 percent, Fourth 20 percent, Middle 20 percent, Second 20 percent or Poorest 20 percent) within that state. So seven different income brackets in 51 states, plus D.C., means every American falls into one of 357 brackets. And the results if you pull up the CNBC research for each bracket is…

Most people in 356 of 357 state income brackets get a tax break next year, with the only exception being the richest 1 percent in New York, those making more than $888,520, as 61.3 percent of them get a tax hike.

So the “great” parts of the tax plan is it gives the vast majority — not just the richest — a tax break next year. This is a long overdue simplification of the out-of-control code, and most agree the corporate tax rate needed to be lowered now that all foreign countries competing for our dollars are so much lower than ours.

Tax Bill — The Ugly

The tax bill could be a great Christmas tree if left as across-the-board tax cuts along with the lowering of the corporate tax rate, which is long overdue, and having the alternate minimum tax truly put back in place to insure the super wealthy cannot avoid paying taxes. Unfortunately, special interests would have their lobbyists weigh the tree down with self-serving heavy ornaments.

After justifiably blasting Democrats for ramming through Obamacare without giving anyone a chance to read it, Republicans desperate for a win put together a plan and then allowed goodies to be written in the margins.

This goes to the central concern of Take Back Our Republic. Those who can afford to make big political contributions and hire lobbyists can get a much greater return than any business investment.

Lobbyists have come up with a way to enrich the elected officials themselves. For example, Senator Bob Corker originally voted against the tax bill, but then switched sides once a provision was added giving millions of dollars to wealthy real estate owners. Senator Corker directly benefits from this as he is a wealthy real estate owner himself. While I criticize the deceptive headline on the aforementioned CNBC piece, they did build on Open Secrets' research to write a separate piece that stated:

"The provision allows for a tax deduction on income made from 'pass through' entities, like real estate LLCs, including those with few or no employees. It could thus benefit Senator Bob Corker and President Donald Trump, who both have real estate income."

"According to the website Open Secrets, President Trump owns corporations operating as LLCs."

I do not have space to document all the other endless goodies for special interests in this plan, but much as Pharma took care of themselves in both Obamacare and the attempted Repeal and Replace, and the big four banks took the taxpayers' money for their bailouts after their irresponsibility led to the collapse, this secretive system that allows dark and unlimited campaign contributions leaves you the taxpayer paying the bill.

One final civics note: when the House and Senate pass different versions of the same bill they get together in conference committee to see which side will give in or if they can compromise between the two versions. So if neither the House or the Senate thought the highest income bracket needed to be lowered from 39.6 percent to 37 percent, why would the conference committee “compromise” by going way below what either Chamber thought … other than the lobbyists for the rich.

The Democrats share the blame for making it clear they would not allow any Senate votes for any version, thus removing themselves from the debate on how to shape the bill.

While both sides are hypocritically talking about how many more dollars the rich pay or receive (obviously they have the most money and pay the most), The Wall Street Journal correctly noted that the top five percent of earners get twice the percentage savings as those who make less, but do not have influence in Washington.

Tax Bill — The Bad

When I talk to good economists off the record, they admit that the economy is so big that the competing models really do not work, therefore I am not going to pass judgment on whether or not the overall impact of the bill will be good or bad.

I will only say that this long overdue reform could have been the big, beautiful Christmas tree if it stuck to tax relief for the working class, resisted lobbyist attempts to give the 1 percent real estate moguls a big tax cut, simplified and lowered the corporate tax code, and got the alternative minimum tax back to the original intent of preventing the very wealthy from avoiding taxes... even if they own big real estate companies.

The final bill is much worse than it would have been without the distorting impact of a campaign finance and lobbying system run amok. I do not mind the philosophical argument for sticking it to increasingly left-wing 4-year universities by taxing their endowments and questioning the student loan deduction (later added back into the system). Tennessee found savings in a similar way, and used the savings to fund allowing every teenager in the state to go to a two-year college for free rather than helping the children of real estate owners.

The inability to stand up to a pay-for-play campaign finance system means tax credits will sun set and if another $1.5 trillion is added to the deficit on top of the huge hit from the Obama years, then taxpayers will need to look no further than the special interests to see who stole their money from what otherwise would have been a great tax reform moment.

John Pudner is Executive Director of Takeback.org, a non-profit home for Americans seeking true political reform. Our conservative solutions include: stopping illicit foreign money from impacting elections; ending pay-to-play in government contracting; and restoring the Reagan-era federal tax credit for small-dollar political contributions, which will encourage more citizens to become donors and help re-balance the campaign finance system. For more of his reports — Click Here Now.

© 2019 Newsmax. All rights reserved.

   
1Like our page
2Share
JohnPudner
So let’s start with the great part of this tax reform; then once again show how lobbyists changed things.
tax reform, lobbyists, corker
1212
2017-17-18
Monday, 18 December 2017 10:17 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved