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Tax reform: and the rich gets richer

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By The Honorable Dwight Tillery

Former Cincinnati Mayor

Dwight Tillery. Photo provided

The Republicans are moving quickly to pass legislation that will overhaul our tax code by the end of this year. The principle idea behind this legislation is to make the code simpler for Americans to file their taxes. And, the supporters of the bill claim that this will create jobs. In fact, the law is called “Tax Cuts and Job Act.” The title in and of itself is alluring but what are the real motives behind this bill. How could anyone be against a tax cut or new job creation?

There is much discussion going on regarding the pros and cons of this proposed legislation—far too many for this article. However, It’s worth sharing some of the high lights captured by the Washington Post newspaper article of November 2, headlined “Winners and Losers in the GOP Tax Plan”:

“Winners

Big corporations. American mega-businesses would get a substantial tax reduction. The bill cuts the top rate that large corporations pay from 35 percent to 20 percent, the biggest one-time drop in the big-business tax rate ever. On top of that, companies would get some new tax breaks to help lower their bills, such as the ability to deduct all the costs of purchasing new equipment, as well as a special low rate on any money they bring back to the United States from low-tax countries such as Ireland. Many businesses have been holding cash overseas to avoid 35 percent U.S. taxes. Now they would get to bring the money home at a tax rate of 12 percent. The entire business tax system would also change from a worldwide system, in which money anywhere around the globe is taxed, to a territorial system in which it’s mostly money made in the United States that is taxed. Businesses have long lobbied for this change.

The super-rich. The estate tax, often called the “death tax” by its critics, would go away by 2024, meaning wealthy families would be able to pass on lavish estates and trust funds to their heirs tax-free. At the moment, only estates worth over $5.49 million face the estate tax (the GOP plan doubles that amount immediately until the tax goes totally away). The mega-wealthy also would get to keep charitable deductions, a popular way to lower their tax bills, and they no longer would have to pay the alternative minimum tax (AMT), a safeguard against excessive tax dodging that’s been in place since 1969.

Losers

The working poor. While the bill includes lots of tax breaks for big businesses and the rich, the bottom 35 percent of Americans do not get any extra benefits, according to Lily Batchelder, who served on President Barack Obama’s National Economic Council. They already have a $0 federal tax liability. Some argue a more equitable tax system would increase the credits (money back) that lower-income families get, especially those that work low-wage jobs. The GOP preserves the earned-income tax credit, a popular refundable credit for the working class, but the bill does not expand it.”

We have become a nation of money. Since our political system is up to the highest bidder, the middle and lower classes are the losers, and as the super rich continue to control the money in this country, those two classes will continue to spiral down. This means that the middle class will blame the lower class for its economic troubles. The issue of race and class—which I believe are intertwined—will only further the racial divide this country. Trump, with his cabinet filled with the rich and super-rich, seems just determined to get richer while castigating those at the bottom. Somehow, people like him and there are many in attitude, believe that reducing their tax rate is somehow not receiving some form of welfare as compared to those at the bottom.

Four the last four years, we have seen this play out in this city with the mayoral race reaching three million dollars, and a seat on City Council costing more than five hundred thousand dollars. The failure to vote by those who are at the bottom will make it easier for the rich to get richer.

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Comments

  • Bravo! Absolgutely spot o

    Kathy Burns December 6, 2017 9:04 am Reply

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