The GOP’s “Tax Cut and Jobs Act” is the most odious piece of legislation I have witnessed in my nearly 70 years. It codifies the economic cannibalism of the lower and middle classes by the oligarchy, and it will likely destabilize American society within a decade. Passed by strict party-line vote without public hearings, testimony of expert witnesses, or a single Democratic “yeah,” this bill is a wholly owned abomination of the GOP.
Vulture Capitalism vs. Economic Cannibalism
In January 2012, during the presidential primaries, GOP hopeful Newt Gingrich raised conservative eyebrows by accusing GOP frontrunner Mitt Romney of practicing “vulture capitalism.” Gingrich, it turns out, was being uncharacteristically charitable.
Vultures serve the ecosystem by recycling what is dead. Romney’s Bain Capital raked in its wealth by what could more accurately be termed economic cannibalism. Bain’s modus operandi: buy up healthy companies, saddle them with debt, wait for them to go under, and then “harvest” their assets. Think of a rogue doctor who willfully makes patients sick. The doctor then sells the patient’s organs when the patient dies.
The GOP tax plan now slithering toward Trump’s signature will inflict similar economic predation at the national level.
Heightening “Dangerous” Levels of Inequality
Wealth and income inequality in the US are at their highest levels since the Great Depression. Further upward redistribution of wealth will aggravate inequality already considered “dangerous” by former Fed Chairman Alan Greenspan. Greater inequality will likely push America over the brink into economic instability and social unrest.
The “Tax Cut and Jobs Act” is a reverse Robin-Hood scheme. It’s a giveaway to corporations and the wealthiest on the backs of everyone else. Eighty-three percent of the tax benefits will go to the top one percent. And, whereas tax relief for individuals will expire, corporate tax breaks will remain.
Four hundred wealthy Americans of conscience recently wrote an open letter to Congress urging that their taxes not be cut. Why? “[We] oppose any legislation that further exacerbates inequality.”
Ballooning the Debt
Any opportunity to impose trickle-down economics—despite its forty-year history of failure—can transform a Republican deficit hawk (like House Speaker Paul Ryan) into a profligate spender in a New York minute.
The tax bill’s centerpiece is reduction of the corporate tax rate from 35 percent to 21. Republicans argue that corporate tax cuts will largely pay for themselves by stimulating the economy. On the contrary, the Penn Wharton School estimates that, even under the most optimist assumptions, the tax bill will add nearly $2 trillion to the national debt within a decade.
A second open letter to Congress—this one by economist Stephanie Kelton of Stony Brook University and colleagues—bares the fatal flaw in the GOP’s miraculous-growth assumptions:
The current tax plan will prove ineffective at best. More likely, it will further the collapse of wages and widen the already dangerous levels of income and wage inequality that become so obvious that both political parties referenced them during the 2016 presidential campaign. Our central problem is not insufficient profits for corporations. Consumers, not employers, are the real job creators [emphasis added] and cutting the corporate tax rate won’t jumpstart the economy.
Two-hundred credentialed economists signed Kelton’s letter, which further states that the only economic stimulus that works is trickle up. “Strong demand will only materialize if consumers are empowered with higher wages and relieved of their debt burden.” This assessment is supported by an extensively researched report of the Institute for Policy Studies (IPS) titled Corporate Tax Cuts Boost CEO Pay, Not Jobs.
If the reader needs hard evidence that Wharton, IPS, and Kelton are right, and the Voodoo economists wrong, then look no further than the economic debacle of Kansas. In 2012 and 2013, Governor Brownback and Kansas’ Republican statehouse, having drunk the trickle-down Kool-Aid, enacted massive tax and spending cuts, promising Kansans the same economic pie-in-the-sky now flouted by Steve Mnuchin, US Treasury Secretary. Five years later, the results are in. “The Great Kansas Tax Experiment Crashes and Burns” reported Forbes on June 7. Job growth is anemic, the deficit has ballooned to $280 million, public services have been decimated—especially education—and Brownback’s popularity has plummeted to 25 percent. Kansas is in economic shambles.
Sacrificing the Commons
When the GOP tax plan fails like the Kansas experiment, this time on a national scale, the economic cannibalism will begin in earnest. The social safety net will be sacrificed on the altar of conveniently resurrected fiscal responsibility.
The handwriting is already on the wall. In addition to appealing to financial black magic, the GOP is financing corporate welfare by plundering the commons. A provision of the tax bill eliminates the individual mandate of Obamacare, which will deprive an estimated 13 million Americans of healthcare and drive up rates for many others. And sequestration provisions already in effect will trigger automatic cuts to Medicare, Social Security, and federal student loans when deficits explode, as they are certain to do. A particularly diabolical provision limits deductions for state and local taxes to $10,000, punishing Blue states like California, Connecticut, and New York with higher taxes and more robust safety nets. Meanwhile, CHIP (the Children’s Health Insurance Program), which serves nine million children, has run out of funds while the GOP prioritizes tax cuts for the wealthy.
This is a tax bill of, by, and for the oligarchs, the kingmakers who now own the GOP lock, stock, and soul. This so-called “tax reform” bill has fingerprints all over it, notably those of The American Legislative Exchange Council (ALEC) and its corporate and billionaire patrons. It enacts a massive transfer of wealth to the super rich. It opens up the Arctic National Wildlife Refuge to oil and gas exploration at a moment of extreme climate peril. And it may well mark the beginning of the end for public education, national health care, Social Security, Medicare, and Medicaid, all of which will become GOP-sanctioned targets once deficits explode.
You Can’t Fool All the People All the Time
Most Americans already see through the scam. A Quinnipiac poll of November 15 revealed that voters oppose the bill by a margin of 2-1. If there’s a silver lining to this vile legislation, it is this: the GOP is unmasked. For decades the party of the marauding plutocracy has masqueraded as the party of God and fiscal responsibility. So evil and irresponsible is this tax bill that “the scales will fall from their eyes,” and the American people will see, at last, the rapaciousness of the GOP that Rupert Murdoch, Fox News, and the Koch Brothers have wrought.