Late last Friday night, the abomination of a tax reform bill passed the Senate, 51-49, with only one conscionable republican senator, Bob Corker, voting against it. The bill was shoved through with last minute changes that the democratic senators were denied a chance to study before the vote was demanded. No citizen review was allowed. It was literally rammed through, as republican senators strived to pay homage to both their wealthy campaign finance donors and to Donald Trump, who was making demands and threats. It is not the way our government is supposed to work, but under this administration, this Congress, there is no longer any We The People, no constitutional protocol.
I could write at length about what this bill means, and I will no doubt do so in the coming days, but my purpose in this post is to look at what comes next: the reconciliation process between the House and Senate versions of the bill. Might there be enough significant differences to keep the bill stalled? To ultimately alter the bill in ways more favourable to common sense, less disastrous for the fate of the economy? Let us take a look.
The major similarity between the two bills is the reduction of the corporate tax rate from 35% to 20%. That is a huge difference, my friends, and I assure you that if you are in an income bracket anywhere above $46,000, you are paying more than 20%. This is supposedly going to stimulate the economy. Well, first off, the economy is not in need of a jump-start at this time, as it is doing quite well. Second, as I have said before and I will now say again, the money the corporations save will not “trickle down”, but will remain in the pockets of the already-wealthy. Trickle down economics is largely a myth. And thirdly, if we are taking 15% of current-level corporate taxes out of the federal budget, how do we replace it? Two ways … borrow, borrow, borrow, and cut programs that benefit people, such as food stamps, health care, education, the environment, social welfare, and others.
The most glaring difference between the two bills came as one of those last minute changes to the Senate bill. The Senate bill keeps the Alternative Minimum Tax (AMT) that does just what the name implies: sets a minimum tax floor for wealthy earners. The House bill scraps the AMT, which has long been a deal-breaker among the GOP. My best guess is that the Senate decided at the last minute to keep it in order to gain the votes of more moderate republicans, like McCain, Flake and Collins, and will now be willing to scrap it in the reconciliation process. Yes, mine is a cynical view, but we have reason for cynicism, do we not?
There are other contentious issues, but the AMT may stand out as the main point of discord. For a fairly comprehensive, yet understandable listing of the differences between the two bills, check out this article on NPR . Both House and Senate will begin on Monday trying to meet somewhere, be it the middle or the far right. Republicans seem confident, and even democrats concede that the two versions agree on enough major points that they have likely crossed the largest hurdles. Mitch McConnell was nearly giddy as he made the rounds on the Sunday morning talk shows, saying “We’ll be able to get to an agreement. I’m very optimistic about it. And we think this will make a big difference in getting our economy moving again and providing jobs and opportunity for the American people.” Sigh. I am getting sick and damn tired of repeating myself here. This bill will do more to harm an already-healthy economy than it will to help one that is not in need of help. This bill is not even designed to help the economy, or the working class, or the poor … it is designed to help the rich get richer. Wake up, Mr. McConnell, you with the $22.2 million net worth … wake up and smell the coffee that we little people are brewing as we munch on a piece of dry toast or slurp our 50-cent ramen noodles!!!
Once the disparities are resolved, a single bill is written, called the ‘conference report’, and it is this that will be presented to Trump for final approval. There is no doubt in anybody’s mind but that he will approve it, for it will be his first legislative win of any consequence in nearly eleven months in office. But it is his win, not ours, for we are the losers. What, briefly, are some of the things that would apply to you and me? Let’s look at just two of the most glaring potential changes:
- Under the House bill, property owners would still be able to deduct property taxes, but not other sorts of state and local income taxes. Under the Senate bill, no deduction at all would be allowed for state or local taxes.
- Have large medical expenses? Under the House bill, you can no longer deduct them. Under the Senate bill, nothing changes and you can still deduct your excessive medical expenditures.
Under both the House and Senate bills, most other deductions for individuals would be eliminated, meaning you could no longer take deductions for unreimbursed employee expenses, student loan interest, moving expenses, home office expenses, and tax preparation expenses, to name a few. Aren’t you glad to see they are looking out for us?
My hope is that they are unable to easily reconcile the two bills, but frankly, I think it is a futile hope and I expect them to have it reconciled by the end of the day on Friday. Since there is no chance that Trump will refuse to sign it, expect it to become law. What’s next, you ask? Fasten your seat belt, folks, for next up is the spending bill, whereby they will no doubt further chop away at the things that benefit We The Ordinary People. Stay tuned …