The Toxic GOP "Tax Reform" Atrocity That May Well Eliminate The Safety Net - HEADS UP!!

"It's hard to imagine  a more venal and hard-hearted device to pay for a tax cut for the wealthy than what the GOP has on offer" - Ron Klain

"This is the most irresponsible tax legislation in the history of the United States...there is absolutely no justification for this legislation." - Economist Bruce Bartlett

It is a curious feature of the human brain that it is easily overwhelmed by a torrent of bad news, or even news of a particular type. Much of this also plays into the current narrative of "information overload", or the fact that too many are confronted by so much new information it's like trying to drink water through a firehose.

Alas, there are times when this tendency to take the eye off the ball is understandable - but not now. Not with this latest iteration of the GOP tax "reform" bill which is as close to a political atrocity as we've seen in recent times. Thus, people need to grasp the warp and woof of this abomination - especially the fact - as economist Bruce Bartlett pointed out last night ('Last Word') that once the tax reform plan itself passes the stage is set for worse. This is because the next step will be reconciliation with the budget that has already passed!

Why is this an atrocity? Because the budget the Republicans passed to increase the deficit by $1.5 trillion , in Bartlett's words: "also contains 4 trillion dollars in cuts to Social Security and Medicare".

Thus a BIG part of what's paying for this egregious tax cut are future spending cuts to the most needed safety nets, including Medicaid as well.  Bartlett also sought to alert viewers that once this perfidy passes, the  worst is still to come. In his words:

"The Congressional Budget Office pointed out yesterday that because of existing law called 'pay go' automatic spending cuts will take place the minute this legislation takes effect and $25 billion will be cut out of Medicare in fiscal 2018  and for many years to come - and that's already in law."

We expect these cuts to Medicare will be indirect, in the form of cuts to  physicians' reimbursement by the Center for Medicare and Medicaid Services.  This means many Medicare beneficiaries  will no longer be able to get medical access because doctors will no longer accept them. As it is, millions of Medicare recipients have to do arduous searches to find providers because Medicare doesn't reimburse at private insurance rates. It also lays the ground for the implementation of a voucher system.

The scale of the spending cuts cited is mind boggling and it is likely that the first Social Security target - as has often been cited in the WSJ - will be Social Security disability insurance. Since the Great Recession this has increasingly become the final financial backstop for millions of unemployed - many laid off in the wake of the 2007-08 financial meltdown. After that as David Leonhardt has pointed out in the NY Times, the template is set for the CPI (Consumer Price Index) to be shifted to a less inflationary measure so that the Social Security COLA can be reduced. This will effectively be a higher tax on seniors as well as an increase in Medicare premiums.

All of this adds to an economic atrocity.

The GOP tax reform is even more hard- hearted and dastardly  as we've recently  learned that 46 percent of the world's wealth is controlled by 0.07 percent of its population.  Added to the sheer economic savagery are two poison pill insults  embedded into this misbegotten,  legislative  farrago masquerading as help to the middle class.

1. It includes a provision for drilling in the Arctic Refuge. Yep, you read that correctly - and these miscreants are hoping you aren't conscious of it.

2. It includes yet another effort to validate "personhood".  (Since so many state referenda efforts have failed like here in Colorado).

As Slate author Christina Cauterucci points out:

"In a provision about tax benefits for college savings accounts, a section wholly unrelated to health or pregnancy, the bill’s authors proposed a new definition of life itself:

'Nothing shall prevent an unborn child from being treated as a designated beneficiary or an individual under this section,' the legislation reads. 'For purposes of this paragraph…the term ‘unborn child’ means a child in utero. … The term ‘child in utero’ means a member of the species homo sapiens, at any stage of development, who is carried in the womb.”

Adding:

It takes some audacity to slide ostensibly “pro-life” language into a bill whose egregious tax cuts for the wealthy would be funded by life-threatening cuts to Medicaid and Medicare.

Consider this anomaly on its own merits: these GOOPr dweezils are inserting this "pro life"  bafflegab even as they seek to terminate any life potential for the elder citizen - given his Medicare and Medicaid (for those in nursing homes) will now be on the chopping block. How perfidious does it get? Well, much more!  Rationale? As Cauterucci observes:

"Giving fetuses access to tax benefits could trigger an If You Give a Mouse a Cookie situation that ends with microscopic clumps of human cells getting birth certificates, marriage licenses, and political appointments.."

Let's leave aside for the moment the fact that no sane person   in his or her right mind (pro-life GOOPs excepted)  can possibly regard a "zygote" as a person, or a fetus as an "unborn child". There is simply no standard by which that passes even elemental laws or tests of logic, or science.  A child cannot be "unborn" because by definition it is already born!  Thus, we send the 'child' to school, to take his medicine and so on. If unborn, it's a fetus, not a "child". Don't these ignorant Reeptard tax reform twits know any better?

Meanwhile, a person, a human person, must have at least minimal capacity for basic cognition and rudimentary choice. It must possess a brain, at the very least, which evinces definite brain waves. Anything that doesn't is a proto-human entity, but clearly not a person. The logical error made is called the "genetic fallacy". That is, arguing that because a thing is going to become something, it IS something. It would be like me picking up an acorn and claiming it's an oak tree. Nope. No way.

Apart from this refuse, on which basis this slop that passes for a bill ought to be DOA anyway, there is this overarching axiom: This tax bill is solely designed to rob most of America of its social safety nets in order to deliver an average tax cut of $58,000 to each millionaire  What might these entitled ones do with their extra loot - compliments of raiding the health plans of the rest of us (the CBO forecasts 13.8 m will lose their health care in the first year after this piece of shit passes - if it does)?  

Well, let's see now, the 1 percenter wives might jet off to special villas in the Caribbean (e.g. St. Lucia) where they can partake of "chocolate scrubs" and "rose wine wraps".

Pretty good, eh? While some poor elder schmuck is dying of caner -  because it's regarded now as a "pre-existing condition" - which will no longer be covered.  But hey,  the extra $$$ will allow a fatcat and his pal to jet off to the same destination for 18 holes of golf in idyllic surroundings

- Say while a kid perishes from a peanut allergy because his mom could no longer afford epi-pens and their ACA benefits were nixed because of terminating the Obamacare mandate.

On getting home, these wealthy scions and recipients of GOP tax fortunes  can check their portfolios again, and ensure their hedge funds are still making money while all the little guys are losing with their pathetic and pedestrian mutual funds.

Ah yes, the life of the typical one percenter. How sweet it is under the Trump-  GOP Reich!

But we haven't even gotten started yet - at least I haven't. Let me reference that while many of the Dems are scratching their heads about how pulling the ACA mandate got into a tax plan, a WSJ editorial two weeks ago ('Tax Reform and Obamacare') first dropped the sordid seed, declaring:

"Republicans are looking under every seat cushion to finance tax cuts....One surprising potential 'pay for' - believe it or not - would be repealing Obamacare's individual mandate."   

Adding:

"Killing the mandate now would also make it easier to revisit health reform next year."

Asserting then that "with the mandate already gone, the CBO would most certainly find there would be fewer uninsured under any new reform the GOP would propose."

Well, of course! And the CBO on weighing this new iteration has found that 13.8 million will lose coverage - hence be "uninsured". But that is most certainly not a good thing as the Journal tries to portray it, other than being more expeditious for the GOP in their next health care try. It means those 13. 8 million people will be without a health safety net and will risk losing everything should a bread winner be in a car crash or even come down with this serious H3N2 flu due to flare up soon.  In terms of the sheer tax benefit, i.e. finding the cash to cover what is given to the rich so they can enjoy their chocolate scrubs and golf  - the CBO estimates a $330b "savings". Transl. $330 b less to spend on citizen health so it can be transferred to the rich who can now enjoy more private Caribbean villa getaways.  (And we aren't even reckoning in the $4 trillion future cuts to Medicare, S.S. to further fund the lifestyles of the Trumpian rich.)

The next piece of germinating codswallop that surfaced around the same time, also appeared in the WSJ ('Corporate Tax Reform Is The Key To Growth') in an op-ed by Martin Feldstein (Nov. 6, p. A17).  In it we read:

"The most important reform is to cut the corporate tax rate from 35 percent - the highest among major industrial nations - to 20 percent. This will increase corporate capital directly by reducing the tax burden. Cutting the corporate  tax rate to 20 % would raise retained earnings by $2 trillion over ten years"

Adding:

"Capital in the U.S. will move from low productivity uses in agriculture and housing to corporate investments that can create good jobs and raise real wages."

I don't know what planet Marty is living on, but the one I inhabit badly needs affordable housing - also enough food to eat! If he regards agriculture and housing as "low productivity" it must mean he wishes to shift capital away from those economic activities. But in the real world that means lower supply of food and housing, hence higher prices for each because the demands of a larger population will drive it. (The rents in Denver are already at a whopping high of $1,800 a month for a 1 bedroom apartment).

So he is asking us to believe that these fantasy potential "higher wages" will cover the costs of ever scarcer housing units, and less food. Is he nuts, or merely gobbling too much MJ candy?

Now, let's cut the crap and interject some reality, in the form of actual fact pertaining to the corporations.  As I've posted on before, the corporate profits are at near record levels but they are not being used to invest in labor capital or even infrastructure. Companies are in fact spending most of their loot on stock buybacks or issuing dividends rather than creating new jobs. So it is the epitome of delusion that with even more profits - compliments of tax cuts - they'd all of s sudden become noble corporate citizens.   No they would not, you can take it to the bank.

More reality:

While it is true the U.S. has the highest statutory tax rate for corporations among developed nations, this is not what they actually pay. Thanks to the thousands of deductions and exemptions in state and federal tax codes many corporations pay zero . That is how desperate many states are to secure jobs (say from Amazon) that they are prepared to give the CEOs whatever they want - even as their states suffer.

Further, as a percentage of gross domestic product (GDP) the total U.S. tax burden - covering all levels of government - was ranked 28th out of 32 developed nations.  Read that again, as the fourth LOWEST overall tax rate in the freaking world!

Let's drill this down one more time that supply side tax cuts never work. In previous posts I already went over how Gee Dumbya Bush cut taxes deeply and growth effectively collapsed. A Financial Times analysis even confirmed it. The end result is that real GDP rose barely above what it was in the 1990s.

Also the idea that corporate tax rates create jobs is utter nonsense.  Sara Anderson of the Institute of Policy Studies looked at 92 profitable large corporations what already pay at or less than the 20 percent rate the GOP humpers want - thanks to loopholes in the existing code. But know what? these same 92 corps have been laying off - not adding workers over the past three years.

In the end if this abomination of a tax reform plan goes through it means that the tax cuts will be paid for via vicious cuts to government spending that affect many millions of citizens.  These cuts will involves not only ACA access but also Social Security, Medicare and Medicaid cuts as well. People who stand to get maybe $15 in tax cuts, will be dinged in the ER for thousands of bucks in medical fees once they're no longer covered under the ACA - once the individual mandate goes.

But as we know there is always political payback. The results of the state elections last week, especially in VA and NJ, showed people - voters are paying attention and they have not liked what they've seen with GOP efforts at cutting their health care. The GOP thereby paid at the polls with significant Dem wins. They will pay in ever bigger form in next year's mid terms, if this atrocious GOP tax bomb passes. 

After that, I look for the steady decent of the GOP into political oblivion, just like the Whigs. Because it will show once and for all these reprobates can't be trusted with citizen welfare or security. And the ultimate citizen security is having good health  - hence having access to affordable health care.  As Sen. Patti Murray put it:

"The elections last week clearly showed the American people are paying attention and they don't want their health care taken away."

See also:

http://www.smirkingchimp.com/thread/chuck-collins/76270/stop-talking-about-winners-and-losers-from-corporate-tax-cuts

Excerpt:

"The driving motivation behind this bill, rhetoric and packaging aside, is to deliver a whopping $1 trillion tax cut for a few hundred badly behaved global corporations — and another half a trillion to expand tax breaks and loopholes for multi-millionaires and billionaires.

All the other features of proposed tax legislation are either bribes (“sweeteners”) to help pass the bill or “pay fors” to offset their cost. The news media has been talking about “winners and losers” like this were some sort of high-minded tax reform process with legitimate trade-offs, as in 1986.
But this isn’t tax reform. This is a money grab by powerful corporate interests."