LETTER TO THE EDITOR: Clearing the record on the Republican tax plan

It is difficult to have a calm discussion of differences when one demeans another by using words such as “invective,” “sarcasm,” “poisonous hate,” “class clowns,” “class warfare,” “obscene,” “vilify” and “oh the humanity” when reacting to another’s point of view. Nevertheless I shall correct my errors and those of Mr. Roof in his Jan. 6 letter (“Of vilifying the Republican tax act, president”).

First, his 91 percent of taxpayers who will receive early benefits was more accurate than my 83 percent. His “constitutional” 60-vote majority is inaccurate.

Article 1 of our Constitution established our bicameral Congress. It mandated that each House will establish its own rules and procedures for debate. It also mandated a two-thirds majority to impeach and convict the president, to expel a Congress member, to override a Presidential veto, to ratify a treaty, and to amend the Constitution. The Senate rules allow for unlimited debate called a filibuster. In 1970, because civil rights legislation was being filibustered, the Senate established the 60-vote cloture rule to end debate. This corrects Mr. Roof’s statement.

The Congressional Budget Act of 1974 established the procedure of reconciliation which allows a simple majority of 50 percent plus one to pass budget-related items, avoiding long debates. Debate must end within 20 hours in the Senate. House rules are different. In 1990, Sen. Robert Byrd was able to establish a Senate rule preventing budget-related legislation from lasting more than 10 years if it substantially increases the deficit. It also prohibits changes to Social Security.

The House Ways and Means Committee of 42 members has majority of eight Republicans. The Senate Committee on the Budget has 22 members evenly divided between Republicans and Democrats. Because of their majority in the House, Republicans could pass their own proposals for the “Tax Cuts and Jobs Act of 2017” by simply ignoring Democrats’ input, which they did.

In the Senate, a few Republican members of its committee gathered behind closed doors, prohibited Democrats’ participation, and created the Senate version.

The Congressional Budget Office was finally able to score each bill and reported that they would add $1.4 trillion to the deficit over the 10 years. Sen. Corker said that he would vote “NO” on the bill because of the deficit increase. However, a last-minute proposal giving greater benefits to a certain type of real estate investor that included Corker and the president motivated his final “YEA” vote. Mr. Roof was mistaken.

There are three basic parts to the combined, passed and signed bill. The corporate tax rate was “permanently” lowered from 35 percent to a reasonable 21 percent, leaving most loopholes in place. Republicans contend that this encourages CEOs to increase American jobs, wages, employee benefits, and to bring offshore jobs and sheltered money back to the U.S.

The Wall Street Journal’s CEO Council met in November with Economic Adviser Gary Cohn as a guest. At one point the moderator asked for a show of hands from the 100-plus CEOs to see how many would act as the Republicans suggested. Only five showed support.

The TCJA also gives “permanent” major base tax rate cuts, estate tax benefits, and more to the wealthiest 1 percent of individuals and families while, again, leaving most loopholes in place. Finally, the law gives lesser and temporary benefits to the remaining 99 percent of taxpayers. We of the 99 percent will see benefits in the first year but for those earning less than $300,000, these will phase out on or before 2027. A CBO letter dated Nov. 27, 2017 to Sen. Hatch stated flatly that individuals earning $75,000 or less would face a tax increase by 2027.

Republicans posit that the TCJA will promote an annual economic growth rate at 2 to 3 percent over the 10 years of the bill ensuring the “permanency” of the cuts to corporations and the wealthiest 1 percent. Ironically, after the bill became law, Speaker Ryan announced that Republicans would initiate “reforms” of Social Security, Medicare, Medicaid, and Welfare. Too frequently in the past, Republican “reform” meant cutting benefits. This, too, is to ensure the permanency of the 1 percenters and corporate tax cuts.

Mr. Roof wrongly states that “…capitalism has never failed.” Unfettered capitalism has failed twice in recent memory with worldwide consequences. The unregulated Stock Market crashed on “Black Tuesday” in 1929 and was the cause of “the Great Depression.” It took FDR’s public works programs, charities, Social Security and World War II to end the Depression in the U.S. Up through 2007, banks and others in the lightly regulated financial sector had been taking irrational risks. In December 2007 they failed. The “Great Recession” they caused threw 8.7 million out of work. It took the federal “stimulus” and bailouts of lending institutions and automakers to begin the long recovery.

The Republican TCJA eliminates the imperfect Affordable Care Act individual mandate and its “penalty” (tax) on those who cannot prove they have health insurance. The purpose of this mandate was to increase the pool of healthy individuals to make premiums affordable by promoting preventive care and lessen the costs of “sick” and hospital care.

A parallel to this is auto insurance: 49 states mandate insurance for drivers. Premiums paid by the vast majority of safe drivers offset the claims filed by the minority of those involved in accidents. This tends to keep premiums for all reasonable. The elimination of the ACA mandate decreases or eliminates the subsidies that enabled millions to afford health insurance, leaving them to use hospital emergency rooms for sick care that they cannot afford. We all will pay even more for them now through much higher premiums and taxes. This isn’t a scare tactic. It is simple arithmetic.

The Republican TCJA provides major benefits to corporations and the least needy top 1 percent of the population. If the deficit impact does decrease within 10 years, they will benefit even longer.

We, of the 99 percent, get the leftovers of smaller and temporary cuts. Had this been a bi-partisan bill, the benefits might have been fair to both sides, the deficit increase might have been less, and the middle class might have been allowed to strengthen the economy because they would have been able to pay for the goods and services they produce.

Alan P. Gaddis
Dover

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