Senate approves huge tax giveaways for the rich paid for by students, working families

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By Miguel Gonzalez and Amanda Litvinov

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Today, the Senate approved along party lines a massive tax giveaway to the wealthiest and corporations paid for by students and working families. In addition to adding $1.5 trillion to the national deficit, the Senate voted to partially repeal the individual mandate of the Affordable Care Act, which would leave 13 million Americans uninsured and result in drastic spikes in insurance premiums for millions more.

The bill also expands an education tax loophole that would further benefit the wealthy by allowing them to set aside money for private school expenses–essentially a voucher program for wealthy families.

There’s more bad news that affects public schools. As the Washington Post reported, the bill could jeopardize the ability of states and local communities to adequately fund public education, potentially risking state funding for 250,000 education jobs.

The Senate approved the measure even as the non-partisan Center for Budget and Policy Priorities, in a new report titled “A Punishing Decade for School Funding,” found that public investment in K-12 schools has declined dramatically in a number of states over the last decade.

“Public schools have not fully recovered from the Great Recession,” said Utah elementary school teacher and National Education Association President Lily Eskelsen García.

“Now, by eliminating the state and local tax deduction, the Senate just voted to blow a hole in state and local revenue to support public education, potentially risking the jobs of hundreds of thousands of educators, exposing public school students to serious and potentially damaging consequences—ballooning class sizes and overcrowded classrooms that deprive students of one-on-one attention.

“It is outrageous to hand massive tax giveaways for the wealthy and corporate special interests paid for by students and working families,” García said. “This is a terrible bill for the American people and we need more courage from members of Congress to stop this runaway train.”

This disastrous bill demands millions of people of modest to moderate means pay more in taxes, while the services their money is intended to support–including Medicare, Medicaid, and education–will take the brunt of the funding cuts that will be needed to offset the bill’s massive tax giveaways for the nation’s richest citizens and corporate special interests.

Republican leaders are desperate to finalize their tax giveaways for the wealthy before the end of the year. It is expected that the House and Senate will go to conference next week to work out the differences between their bills.

But efforts to defeat GOP tax reform are far from over.

You can help push back against this awful plan: Call your Members of Congress right now. Tell them to VOTE NO on the Republican leadership’s tax bill. Tell them you will not stand for a massive tax giveaway to the wealthy and corporations paid for by working families and students.

Reader Comments

  1. No, trickle down does work. As Hans said quoting whatever sources he used, the poor got a 6% increase in wealth/income. Maybe the rich got more of an increase. Makes sense. Those making more money would have a sense of how to maximize their potential and earn more and more, yet those with lesser skills/potential got less but still got increases. For those who do not believe less taxes work with individuals having more money, please explain why so many people these days employ others to do tasks every homeowner used to do: mow their lawns, plow their snow, landscape their yards, clean their houses, watch their kids….on and on. Everyone’s equality in wealth is not guaranteed. Only the potential and opportunity to improve their situation. In a free society, there will never be financial equality, not should there be. Such attempts at socialism have constantly failed by putting all but the bureaucrats into a low level of living and eventually revolution.

    For those who have never worked in a publicly owned business (ie one where stocks are used as business funding) it is clear you lack an understanding of how such businesses work. They constantly seek to expand, That is the only way to stay profitable. Every competitor is at every other business’ heels and only by expanding can they continue to make money. Economic pressure is constant and unrelenting. Of course one can take the socialist view and accept mediocre results but investors will not accept mediocrity. As all Americans ought to demand growth, and expansion of the economy, all Americans ought to demand lowering costs by shrinking government and requiring less government cost. Now, the size and complexity of the government is such that it strangles opportunity and growth. Tax cuts are stimulants and good for all Americans, well, except maybe for un-American illegal aliens.

    Businesses need to grow to make the economy strong and vibrant. A strong economy creates jobs, better jobs than a lack luster economy and more taxes will result. Concurrently, the out-of-control government spending needs to be reeled in.

    Immediate actions should include: universal conscription and lowering of military wages for draftees in the first few years of service, removal of most benefits for legislators, including no retirement, elimination of all government spending bills that have more than one single purpose, review of the physical condition of all ‘welfare’ recipients who could perform any sort of work, review and cuts in federal grants for the thousands of ridiculous grant programs that are hidden in broad brush spending bills. Cut, cut, cut. Less cost = less need for more taxes.

    1. MarineBob – We already live in a country where the top 1% has 90% of the accumulated wealth of the bottom 50%. Over the last thirty years, a misguided supply side approach of trickle down economics has helped create that situation. If it continues undeterred, then we can look forward to a land totally devoid of a middle class and led by an aristocracy. Is that what you’re advocating?

      I personally believe that a healthy democracy depends on a thriving group of people in the middle and that’s achieved by investments in infrastructure and education. Retraining our blue collar workers for a 21st century economy so they can acquire better jobs and better wages is of paramount importance. These are measures that will directly impact middle class citizens NOW and not at some unspecified “trickle down” moment(if at all) in the future.

      It certainly doesn’t mean putting more money in the pocket of fat cats in the form of a tax cut that only seem to lead to higher dividends for stockholders and more and bigger golden parachutes for CEO’s. Been there, done that.

    2. Dear Marine Bob,

      I do not think you were born prior to the late 1980’s because if you were, you would know that trickle down economics doesn’t work. You only have to take a look at the results of these efforts under Reagan and Bush so you don’t have to go too far back.

      Let’s keep it current though. Please explain to me why a person working to earn a college degree won;t be able to deduct interest on the thousands of dollars of loans they will take out? Why will I lose my deductions as an educator for the classroom supplies I purchase, the unions dues I pay for a fair contract, my local taxes, the interest on loans I took out to help pay for my own children’s college education. Please explain why it is ok to increase the deficit. Please explain why people with incredibly high incomes will have more deductions such as their capital gains taxes reduced, or the ability to keep deductions for their private planes. Please explain why it is ok to eliminate the deduction for additional health care expenses if you have a large % of your income going to these. Please explain why someone with 3 jobs to make it all work as a public educator has to pay more of a % of her income than someone making millions or billions of dollars. Please explain why deductions for private education will be added but public education funds cut. So while it may make sense to cut taxes somewhat for businesses please explain to me why it is ok for the middle class to be paying for these cuts. I simply don’t have the time nor energy to go on here as with 3 jobs it is difficult to get everything done. oh and please take a year and live in a 3rd world country where the government doesn’t have welfare programs and see if your opinion about these programs changes at all. Consider what would happen if you suddenly became ill, lost your job, lose your spouse and needed to support your children…

      1. The simple answer to all your questions is that people need to not live beyond their means. People need to plan and recognize that not everyone can have everything that everyone else has. College students need to understand that taking loans requires due diligence to understand and plan how they will repay those loans. To take on tens of thousands of $$ of loans without a repayment plan is fool hardy. People need to ‘invest’ in insurance, live conservatively and understand they to not need $4 daily coffees, $200 a month phone bills, taking loans for vacations and so on.

        I sincerely believe that some one who works three jobs pays a higher percentage of income than an individual who makes millions of dollars and if in fact that unlikely event occurs, the person making millions will pay a heck of a lot more $$$. People seem to like graduated taxes but only when a person making more than they has to pay more. People do not seem to like that those who have achieved an earning level that allows investment in dividends and so forth should be allowed a lower tax rate to support the economy by investing in publicly owned companies.

        There is nothing wrong with welfare for individuals who warrant help but not for those who abuse the privilege that now appears as an entitlement. Moreover, all welfare, in any form needs to be ‘issued’ on a temporary basis, with a plan to end the support and periodic review.

        The tax plan that everyone ought to support is 10% for any and all income for everyone. No deductions, no exemptions, no provisions for having more kids than you can afford to support. Corporate structure needs to be structured separately.

        The only reason the current concept of graduated tax exists is because congress did not believe tax rates would ever exceed 5-10%. Prohibitionists caused income tax to become law and that’s all liberal/socialist tinkers needed to go wild. There was a movement to establish an amendment to limit taxes to 10% maximum but it was rejected based on the absurd notion that taxes would ever go to that high a rate.

        Business costs are not the same as other deductions so it is improper to mix the two. It takes money to make money and drive the economy. There could be years of discussion as to what is or is not a valid cost for a business and what should or should not be taxed.

        I have worked with people who sincerely believe no individual ought to be allowed to make more than $100K per year without the amount over that figure being taxed at a 90% rate. Such ideas are pure socialism and demonstrate lack of understanding of how people are financially motivated. You might want to look at the history of the Pilgrims first few years of Massachusetts settlement with regard to the Governors’ summary of how things worked. Sounds a lot like a failed plan that Bernie Sanders et al would adopt.

        Bottom line is everyone ought to pay some taxes with no deductions, no exemptions. Fixed rate. My guess is the government would have more money than they knew what to do with. And everyone would understand they must participate

  2. This tax-reform plan constitutes a huge gift to corporations and affluent investors. Republicans currently have the votes to push through this legislation — reflecting their priorities — but they and their standard bearer should stop misleading the American public by claiming that this bill somehow favors working-class Americans. American corporations will use savings from tax reduction to pay dividends to investors and buy back shares of stock. Neither the creation of new jobs nor an increase in worker compensation will occur to a great extent as a result of this legislation. By contrast, the most wealthy members of American society will enjoy a financial windfall.

    Given the rosy assumptions on economic growth being associated with this flawed tax-reform bill, it will not be long before Republicans, citing the further ballooning federal deficit, start advocating cuts in Social Security and Medicare. Millions of Americans depend on these programs to survive.

    The trickle-down theory of economics does not work. The only trickling down will be the tears of Americans as they come to terms with this disastrous tax-reform bill.

    1. I would offer that few readers here, myself included, have much detailed knowledge of how exactly the tax plan would work. I did see however that the standard deduction would essential be something like doubled. For the 2/3’s of people who do not itemize, like my situation, that would reduce my income by something like $12000 so with an effective rate of about 15% (as is the case for most) I’d ‘save’ somewhere in the range of $1000 to $2000. Seems to me that’s a pretty good tax cut

  3. This is not yet a done deal. The bill goes to conference to work out the differences between the House and Senate versions. The bill is hugely unpopular (about 25% approval depending on which poll you listen to). The Republicans Washington know this, but they think they can push it through if they tell people they are getting a tax cut even if many people won’t.

    I think we need to use the few weeks we have to inform ourselves about the details of this bill and then inform our friends and families and urge them to contact our Representatives and Senators. Every Representative and 1/3 of the Senators are up for election in 2018.

    Don’t let them get away with pushing a bill that is bad for many middle-class taxpayers who don’t find out that they’ve been had until after the next election

    1. Interesting that strictly along party lines people either believe a new tax program will benefit everyone or hurt only those who are not rich. Issue is the rich pay most of the taxes now and will continue to do in the future. Losing a few deductions and exemptions is nothing compared to the potential for this tax program to reignite the economy and create many new jobs dumping more and more money into the government’s coffers so the democrats can spend even more on welfare programs and giveaways of tax dollars to slobs who won’t work, accept handouts, free health care, subsidized housing schooling for illegal aliens and on and on. The one issue with this tax proposal is economic growth. That is something Democrats won’t bank on because they are unimaginative and won’t accept that lower taxes is actually a good thing for a competitive economy.

      the idea of trickle down is obvious but people won’t accept the idea. All you have to do is look around. People who work hard and make a good living buy houses, they hire landscapers (typically lower educated workers) they hire housekeepers, they hire all sorts of people without much education or potential for working at high paying jobs. But they do end up with jobs, making money, having pride in not having to accept government handouts. Trickle down is real, obvious, and the way a capitalistic market works. Unless you believe that teachers are entitled to a tax deduction. Imagine for a minute, that more money pours into the government with a boost to the economy. Towns have more money, states have more money: more for education, more for buying school supplies, less need for teachers to spend their own money and complain about it.

      As old Cal Cooledge (sp??) was reported to have said (something like) The business of America is Business. Time to get back to business and do away with welfare and illegal aliens sucking up tax resources.

      1. The right kind of tax cut can be very stimulative, but this tax cut is very flawed.

        Many of the benefits go to large corporations with the hope that they will use the money to hire more people and/or pay them more. The problem with that assumption is that the majority of executives say they will not use the money to pay people more.

        What will cause these corporations to pay their workers more and/or hire more people is to create more demand for their goods. That points to a tax cut that concentrates on the middle class. Indeed, if my taxes go down by $1000 a year I may buy that bigger TV which will give jobs to the people who manufacture, transport, and sell that TV. Those extra people hired will pay more taxes.

        But in this tax plan, the cuts for corporations are permanent while the tax cuts for individuals and families gradually expire. They say that we can count on Congress to renew them, but what makes anyone think that the best Congress money can buy will do that? Maybe, maybe not.

        We need a different type of tax plans and especially those of us in swing states need to contact our members with well thought out and constructive messages.

        1. This is ridiculous thinking. The trickle down theory has never worked for our economy ; the rich get richer and the poor get poorer. Our low middle class and poor families suffer; our schools get less funding. Next, Social Security, Medicare, and Medicaid are on the block for elimination or less funding. American people must stand up and be heard NOW!

      2. Marine Bob – Trickle down economics has never been proven to work for people in all income levels. That’s a FACT. Presidents Reagan and Bush, and the state of Kansas have all experimented and failed with this strategy. It’s a mythical idea being floated by the GOP as a reason to push for tax cuts that benefit mainly the wealthy and big corporations. All trickle down really does is increase INCOME INEQUALITY and DEBT. I looked these up and here are some real facts:

        Fact: Under the Bush tax cuts, the top 5% saw their income increase by 80% while the bottom fifth only saw 6%. Instead of trickling down, prosperity trickled up.

        Fact: Under Reagan’s trickle down attempt, the deficit tripled and taxes had to be raised eleven times to cover the shortfall.

        Republicans creating this current bill are already calling for cuts in Social Security and Medicare to cover the anticipated deficits b/c they know full well what’s going to happen. This bill will balloon the deficit. These are the same conservatives who love to complain about debt and responsible spending until the situation suits them!

        1. Does everyone know that anyone with income over $128,000 does not pay social security tax on ANY amount over that threshold? Percentages which cover Medicare, Medicaid, public funding for services that are written into our congressional laws such as police and fire departments, public education, etc. are paid only by those most affected by these current tax plans. Does everyone know that plans which covered mine rescue training, qualifying dependents and others expired 12/31/16 and were not renewed by this years republican representatives and senators? Does everyone know that state, local and PMI (mortgage interest) taxes all expired 12/31/16? Check with your tax advisors. These facts will be smacking everyone in the face. Monies paid into the government since the 1980s have been stolen and used for other interests besides the reasons we pay them. My prayers for everyone.

        2. The first requirement is not a tax cut but a spending cut! the past 8 years have seen Hugh spending growth for unneeded issues welfare, foreign aid, health care etc so some thoughtful spending cuts are needed NOW. Middle income tax payers will receive more income with less tax take out, they will see income gain. If they are smart and use the new income they can gain in wealth etc. The high income people pay over 70% of taxes today. 50%do not pay any Federal income tax but reap the benefits is that fair to use one of the democrats favorite terms. Fair would be equal tax 15% for all no deductions no exemptions just pay 15% and shut up. 15% of a million or 15% of 10,000 but 15%.

          1. Exactly what ought to be enacted. Only I would propose 10% tax. No exemptions, no $500 for teachers, no deductions, no benefits for having kids you can’t afford, no-nothing except everyone pays 10% of what ever income they get. Everybody plays, every body pays…..10%. IRS goes away, you do your taxes on a postcard, even an art major in college can figure out how to calculate their taxes.

      3. This is ridiculous thinking. The trickle down theory has never worked for our economy ; the rich get richer and the poor get poorer. Our low middle class and poor families suffer; our schools get less funding. Next, Social Security, Medicare, and Medicaid are on the block for elimination or less funding. American people must stand up and be heard NOW!

  4. Saddest most pathetic excuse for poor governing of this nation that I have ever heard!
    Right up there with
    SAD dt’s ridiculous lies and nonsensical
    gibberish.
    What are the real chances this tax reform will ever be challenged and renegotiated from within today’s Washington?

    1. I would offer a solution. Support a constitutional amendment that would limit terms for all congressional seats. People like the Conyers guy are poster book examples, McConnell, Boxer, Schumer, Feinstein, Pelosi, McCain….. good Lord, won’t these people ever go away? About the only thing I agree with liberal thinkers is that the government does not work. The reason is that voters seem to not want to use their term limit power: called voting.

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