Congressman's View: Tax bill: Mercedes for the rich, hubcaps for the middle class
As Republican leadership attempts to rush its tax bill through Congress, let's not forget the cold hard facts of the bill: It hands huge tax breaks to the super rich and corporations, raises taxes on millions of middle-class families, and sets the stage for enormous cuts to Social Security and Medicare.
Each of these aspects of the bill is terrible in its own right. But combined, they constitute nothing less than a scam of historic proportions upon the American people.
At the heart of the Republican tax bill is the age-old myth of so-called "trickle-down economics." Reward the rich, so goes the argument, and they will create more jobs and higher wages for the middle class. But the truth is, trickle-down economics has never worked. If you give the average CEO extra revenue, he or she is far more likely to hold onto that extra money than to create jobs or raise wages with it. In fact, according to 2017 Federal Reserve data, corporate America is hoarding a record nearly $2.3 trillion of cash.
What's more, the National Bureau of Economic Research published a study that found "little evidence that corporate tax cuts boost economic activity" unless implemented in a recession.
Any way you look at it, this tax bill disproportionately rewards the rich and gives the middle class almost nothing.
It reminds me of what U.S. Sen. Ted Kennedy once said about a past Republican tax plan: If you're a CEO, this plan hands you enough money to buy a Mercedes, but if you're a teacher or a nurse or a retail employee, it only gives you enough to buy a hubcap.
Working families shouldn't be left standing on the side of the road, holding a hubcap while the super rich roll by in their fleet of Mercedes.
If that's not bad enough, millions of middle-class families actually would see their taxes increase under the Republican tax bill. According to the nonpartisan Joint Committee on Taxation, up to 16 million Americans would see their taxes go up under this plan. This increase would be partially due to the number of tax exemptions Republicans plan to repeal.
For instance, the House Republican bill, which I voted against, would repeal the deduction for medical expenses like surgeries and vision care, meaning that chronically ill patients and their families could be hit hard with higher costs. The House bill also would prevent students from deducting their student-loan interest from their taxes, making it harder to afford higher education in a country where such education is already far too expensive.
And yet another example: the Republican House tax bill would prevent schoolteachers from deducting the money they spend on classroom supplies like notebooks, markers, and extra books.
All of these deduction repeals — when you pile them on top of a bill already designed to benefit the wealthy — mean that millions of middle-class families will see a tax increase, despite promises made by Republican leadership that no one's taxes will go up.
And here's the kicker: The way Republican leaders plan to pay for their tax bill is by cutting Social Security and Medicare. Republicans themselves have admitted the truth. Sen. Marco Rubio, R-Fla., told reporters Republicans soon will move to "instituting structural changes to Social Security and Medicare." That's code for "cuts." And analyses from the nonpartisan Joint Committee on Taxation indeed have shown that if this tax bill passes, Medicare alone could see cuts of $25 billion a year.
The true goal of Republican House Speaker Paul Ryan — who has been relentlessly ramming this tax bill through Congress — seems to be to privatize Medicare and Social Security. Ryan has been pursuing privatization for years. His budget plans each year included a voucher system for Medicare that essentially would have privatized the program. He doesn't seem to understand that when you sell a program like Medicare off to the highest bidder, it puts the lives of those who depend most on the programs into jeopardy. I vehemently oppose any privatization efforts, and I vow to fight tooth and nail against any cuts to Social Security and Medicare.
The fact is, the American people are going to hold President Donald Trump and Republican leadership accountable. Republicans may think now that they can shield themselves from censure, but if this terrible tax scam becomes a reality, they will have to answer to the American people — and there will be nowhere to hide.
U.S. Rep. Rick Nolan of Crosby, Minn., represents Northeastern Minnesota's 8th Congressional District. He wrote this exclusively for the News Tribune.