Three Takes on the New Tax Plan

The big question in everyone’s mind should be whether the new tax plan will help us in the VA9th, either directly or indirectly. Several interesting observations point to no.

These comments highlight that at some point, 9th district voters need to ignore the party line and start voting for representatives who pursue our best interests. While there may be a few wealthy individuals in the district who benefit from the new tax plan, overall it’s a huge negative.

All district voters should be asking themselves, “what’s in this bill for me?” The honest answer is very little, if not nothing at all.

OK, on to the comments.

The first is from the Economic Policy Institute (EPI), a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. Here’s what the EPI said.

“After spending most of the year promising a tax cut for the middle class, Republicans in the Senate have joined their colleagues from the House of Representatives in reneging on this pledge. The bill passed today is nothing more than a giveaway to the richest households and corporations, period. It will raise taxes on many low- and moderate-income households, and the deficits it will leave in its wake will be used to attack Social Security, Medicare, and Medicaid—a strategy clearly telegraphed by both the Republican budget resolution from last month as well as by Senator Rubio more recently.

Besides lying about who would benefit most directly from the tax cut, defenders of today’s bill have also lied about the trickle-down benefits that will accrue to workers in the form of higher wages. Simply put, this bill will not raise wages for typical workers—but it will deny health insurance to 13 million workers, a measure Senate Republicans included to help contain the overall cost of giving large tax cuts to rich households and corporations. This bill is a scam through-and-through.”

The second is from the ChangeWave Investing newsletter which before now, has been very apolitical. In the December 5 newletter, author Josh Levine states (sorry, it’s a private newsletter, so I can’t provide a link,

“Growth is the key word for those promoting the tax plan. Proponents argue that by reducing the corporate income tax rate to 20% from the current 35% – along with a provision that allows some companies to bring back hundreds of billions of dollars in foreign profits at a lower rate than they otherwise would’ve paid – will translate to higher capital investment and wages. In other words, if the government taxes the rich less, the wealthy will save more, grow US capital stock and investment, and make workers more productive.

While such a tax scheme will ensure higher profits in the short run, thus giving a further tailwind to share prices, there is little evidence to support the case for trickle-down economics.

Fact is the share of national income going to the top 1% has doubled from 10% to more than 20%, while income accrued by the bottom 50% has been almost halved, from 20% percent to 12.5%. There has been no growth at all in the average pretax income of the bottom half of the population over the past 40 years – during which trickle-down enthusiasts promised just the opposite.

Today corporate profits and cash balances are already near historic records, and the business cycle is in the latter stages with interest rates and unemployment at long-term lows. If anything, such a tax plan would be far better suited for an economy at its trough, rather than closer to a peak.”

The third is from a letter to the editor from Rebecca Jones in the Roanoke Times which adds a local bent.

“The TCJA is full of gimmicks which will negatively affect southwest Virginians. Any small tax cuts benefiting the middle-class will be temporary: most of us will see our taxes rise within a few years, and those earning the least will see the biggest tax increase. Tax cuts for large corporations will be permanent, with no guarantees whatsoever that these billions in tax cuts will be used to create jobs or increase wages. Recent history suggests these corporations instead will direct their windfall to stockholders, CEO pay increases, and stock buybacks.

The wealthiest Americans will benefit mightily from tax cuts and the estate tax repeal, while the middle class, small businesses, and colleges and universities will bear the brunt of the noxious effects of a plan crafted to satisfy GOP mega-donors.

For families with children, college and graduate students, and those with student loans, the TCJA repeals vital deductions, making it harder to afford college tuition and significantly increasing student debt. TCJA harms colleges and universities directly in ways which will make higher education much more costly and less accessible.

Shame on Morgan Griffith! Call him today and tell him we are too smart to fall for this con game!”