FanPost

Politics again some more: Does anyone like the direction of this tax bill?

I'm always railing on how people should pay attention to policy and their own policy interest over the outsized personality and identity issues that seem to swamp our politics. Obviously that's often pretty hard lately, what with a president that um.... has such a big personality? (I'm trying here, I really am.) But now we've got one of the biggest pure policy issues of the last several decades in front of us, the Republican tax bill that is forming from the already passed house version and soon-to-be-passed senate version.

The common ground of these bills and likely final reconciliation:

They will drastically cut taxes for corporations and give uneven tax cuts and tax hikes across different parts of the economic and geographic spectrum, and these will change over time to be tilted even more toward the wealthy. The biggest direct winners from the tax provisions short and long term look to be corporations and those at the very top of the economic scale that receive their income from stocks. The biggest direct losers look to be upper-middle class in places like New York and California (anywhere with high state and local taxes, as it ends that deduction.) Most of these folks will simply pay more tax if it is passed, it's flat out a hike for them. Graduate students everywhere might have a major hike, all folks with college debt might see a hike if the house version wins out. It will almost certainly expand the deficit and eventually force automatic cuts in other parts of federal services that don't get special waivers (i.e. that don't have big money lobbyists.) It will end the ACA mandate upon which the healthcare law's stability largely rests. It's structured over time to phase out much of the short-term benefit in the middle classes while making the cuts at the top more permanent and durable, the distribution of benefits looks much different in 2028 than 2019 - it favors the extremely wealthy more as time goes on. It incentivizes automation and replacing labor expenditures with capital expenditures. The strong majority of top economists across political spectrum feel that it will not create significant growth. It's currently widely unpopular, with nearly twice as many people opposed to it as in favor, though with enough undecided that if they all decided to back it, it would be neutral.

To me it doesn't really seem to tick any of the boxes Trump talked about in the campaign, consensus is it will increase income inequality and no relief is targeted to the working class over the wealthy and the wall-street class. To the extent that it does increase growth, the gains from that will go overwhelmingly to the wealthy, especially over time, and even those gains won't come close to offsetting the increase in the deficit. It's deficit spending to benefit the wealthy in a trickle-down reboot. The way it incentivizes automation almost ensures that blue collar workers will have less clout going forward.

What do you think?


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