I have to admit that it is somewhat hard to write about the Senate vote last Saturday morning at 2:00 am on the new tax bill. In part because few know what is in the 479 pages (I thought taxes were going to be simplified) and because it has to go to conference to be compared with the version put out by the House. But I do have a few general thoughts I would like to share.
Do you remember when the Tea Party started? Some refer to as the White Tea Party. It came into existence in response to the nation electing its first African-American president in 2008. It was composed of people who were conservative Republican voters. It caused an upheaval in American politics and brought about a big change in the membership of the House in the election of 2010 when the Republicans took 63 seats from the Democrats giving them a majority in the House and putting in to the Speaker’s seat John Boehner. It gained greater influence with more victories in later races.
As I recall they were what we came to know as deficit hawks. They were against raising the debt limit. Their main goal above all else was to reduce the federal deficit and do nothing to increase it. Did anyone find it strange that when push came to shove, that is, when passing a tax bill that helped their rich friends their interest in reducing the deficit vanished? They all voted for the tax bill which will add upwards of one and a half trillion dollars to the deficit even if things go swimmingly well over the next few years. How could that be? All that makes sense to me is they had no concern at all for the deficit but used that as a way to con people into believing that they did. I know, big deal, politicians lie all the time.
That switcheroo is bothersome but what most bothers me about the rich man’s tax bill is its approach to education. Generally education in America is horrible. I read that in Missouri to save money kids are going to school only four days a week. You’d think we’d want to do something about that and ensure that all kids in America have access to good education. Perhaps, though, it is the GOP intent to keep Americans dumb. Dumb people vote against their interests. It certainly is in the interest of no middle class or below Americans to vote for the rich man’s party but many do.
Two things stand out to me. The first which is the most absurd is the idea that students in graduate school who get tuition aid or grants will have to declare the value of that aid as income. The idea is if you go to a school where tuition is 60,000 and you get 50,000 in aid you will have to pay taxes on that 50,000 amount. Aid being given out on a need basis means that will cause many American kids of moderate means to be unable to go on to a graduate education. The rich Americans and foreigners will be the only ones with advanced degrees.
The other thing is the abolishing of SALT deductions. Those are state and local income taxes. As you know real estate taxes go to providing education. When they are no longer tax-deductible people are going to balk at paying them. The result will be fewer funds available for our public schools. All right we have to tighten our belts a bit for our rich neighbors who probably have their kids in private schools.
But guess what, the costs of going to private schools will be deductible. Just tighten them a little bit more.
Pathetic counterpoints. A 15% tax cut on billions of profits but I can’t wait for my $4,000 bucks! Gimme a break, you will carry water for any of these clowns no matter what they say.
Face it, Tax Reform is where fiscal conservatism and the culture wars collide. Tax your political opponents into oblivion!
My comments addressed two specific sections of the tax bill which were carved out by our good host. They did not address any other part of the sausage factory ingredients or the bill as a whole.
Note is taken that your sole method of debate still is name calling. That is a true “pathetic counterpoint”.
“Note is taken that your sole method of debate still is name calling. That is a true “pathetic counterpoint”.”
Who did you call a racist?
It was not a bald statement. The basis of the evaluation was explained. “… Singling out of one and only one group to be denigrated for promoting their unique interests is Racist.” It is a judgement that I am comfortable with. No one was called a Racist.
There are a number of points with which I agreed with Obama as opposed to the stance of the GOP. By no definition would that make me a Democrat. I am a lifelong, rock-ribbed, Bob Taft Republican.
One swallow does not make a spring. The overuse of a single rhetorical trope does not define a man anymore than in a friendly setting a gentle pat on a unmarried woman’s bottom by a married man makes him a philanderer. But it could get him in trouble as many a Congress Critter is discovering.
You are welcome to spin it any way you want. You called Matt a racist. I would think that any descendant of those fine people of the Mayflower to be adult enough to admit obvious mistakes made. If someone is asked to let go of his racism he is being called a racist.
By the way, racism is described as the belief that one race is superior OR inferior to another race by nature.
Whites are better golfers than Blacks, Blacks are better basketball players than Whites. Both statements are racist. Blacks are better dancers than Whites. Racist, but true! Except for me, of course.
Three issues. First your representation of the Tea Party movement as White Tea Party. Cannot you ever let go of your Racism? For sake of argument I will concede your false characterization. What would be wrong with it being White? Negroes have the NAACP. Jews boast that they ask, “Is it good for the Jews?”, before voting. Hispanics have La Raza. Why am I to be sneered at because the blood of nine Mayflower passengers flows in my veins? Is it because those forebears created a country so great that others want to come to it? Your singling out of one and only one group to be denigrated for promoting their unique interests is Racist.
Second you consider it absurd that graduate study grants be considered income. It is by any definition income. Why should it be given an exemption? Passing this could well have the effect of driving down the inflated cost of graduate study. In order to attract suckers, I mean students, universities may have to reduce costs rather than charge double and kick back half in the form of make believe grants. It could help rationalize the out of control financial structure of post graduate education. Matt, a lot of the price is a scam. Maybe a $350,000/year professor should teach more than one course. A lot of flighty professors are featherbedders.
Third, you complain about eliminating the SALT deductions and whine that it is for the children. That deduction is a subsidy to the rich and super rich. Only a small proportion of the population benefits from it. The richer your community, the more you are not taxed. Palatial schools in Greenwich, Connecticut are built at a reduced cost to the millionaire hedge fund managers while hard pressed families in Quincy do not get their property taxes partially rebated. To put it crudely you do not understand the economic reality of the SALT deduction. If you do not have a high enough income to itemize you get nothing. If you live in Trump Tower you rake in the deduction big time. Our President in on the side of the little guy on this one. He seeks to be a badly needed tribune for the people. Functionally he is a replica of both Tiberius and Gaius Gracchus. Trump’s approach to politics has a long and noble lineage.
You are a joke.
I missed you, Tad. Any snow on the ground yet?
And Trump’s long and noble lineage in politics. Functionally he is a replica of Biggus Diccus.
And don’t stay away so long.
Well said, Matt.
The great American experiment in Representative Democracy.
Good points, Matt!
Conversely, economists, from the Milton Friedman school, would say tax cuts plus fewer regulations, plus freer markets, will cause businesses to boom, creation of more jobs, more overseas businesses to come home, and the deficits will decline and eventually vanish on their own accord.
A person on T.V. said the average family of four, middle income, can expect $2,000 dollars in tax cuts and a $4,000 pay raise by the time the taxes take full effect.
A realistic example: Husband and wife work (he full time; she part time0; they have 2 children; they rent; they live in Texas: their personal exemptions combined are $24,000; they would pay 9% on first 10,000 then 12% of the remainder or about $3,800 on the $36,000 remainder. However they have two children. The child tax credit, $2,000 each, is $4,000; therefore that couple owes no federal income tax. Under present system they’d pay two to three thousand in fed taxes.
Second example: the grad student who works part-time and makes $20,000 and gets $40,000 in grants from Harvard. His taxable income is $60,000. He deducts $12,000 and will owe on the remainder about $5,000 in taxes. He’ll pay the Feds between $10,000 and $20,000 in taxes over two to four years (med school, let’s say). His lifetime earning expectancies will be double, triple or more than a non-grad student. Do you think he will borrow to get through grad school, or stop attending medical, law, mba and other graduate schools, all together.
The point is graduate students, by and large, will be among the upper middle and wealthy. Why should farmers, truck drivers, bakers, barbers and laborers pay more in taxes to subsidize the well-off?
Just raising the counterpoints, which the MSM rarely does.