“There is nothing more deceptive than an obvious fact.”

By Glen Reaux

The Tax Cuts and Jobs Act of 2017 aka BILLS-115hr1enr ¹ of 2017 (TCJA) s the most monumental tax reform since 1984.  Hailed by the Republicans as a tax cut to ease an economic burden on low to middle-class income citizens, they also claimed that it would create jobs.  It does neither.  Rather, it is skillful deception, deceit, double-dealing or trickery otherwise known as sleight of hand.   This bill is a means of facilitating the Republican long term agenda which is to decimate the poor, shrink the middle class, destroy social programs and make the wealthy richer.  To pull off this deceit, obviously, they had to give you something, a tax cut.  Considering the history of Republican legislation, the bills name should have been a dead giveaway.  Now that the new tax law has been in existence for nearly 2 years, middle-class and poor citizens are finally realizing that the  “Middle-class Tax Cut Is Republican Sleight of Hand.”

The Republican tax bill is a partisan law that was passed without input from Democrats. Democrats were denied the their right to offer input.  There were no public hearings or bipartisan committee discussions and it was passed in the Senate literally in the dead-of-night.  Many Americans will see their taxes decline in 2018 and 2019.  Unfortunately, the benefits are heavily weighted towards the wealthy.  The nonpartisan Tax Policy Center (TPC), analyzed the plan and found that 80 percent of its benefits will go to the top one percent by 2027.  The TPC discovered that in 2018, Americans earning less than $25,000 a year will see an average tax cut of $60, while those earning more than $733,000 will see a cut of $51,140.  Grow American Incomes Now (GAIN), a competing tax bill put forth by Democratic Senator Sherrod Brown and Representative Ro Khanna offered a more balanced tax approach that would not only have given the middle-class a larger tax break, also, it would have actually raised the income of low-income and middle-class families ².  In 2019, the TCJA provides the poorest Americans a tax cut of 1%, middle class 8-14% and the wealthiest Americans 20-29%.  This equates to tax cuts of $80, $730-$1,260 and $10,910-$53,210 respectively.

While your tax rate, based upon income has changed, you lose most of your deductions that would reduce your tax bill significantly.  One deduction cut in particular which is mean spirited, effects teachers.  Teachers, who we can agree are drastically underpaid, usually buy school supplies throughout the year and give away to needy students.  They also buy needed classroom supplies that, the schools do not reimburse them for.  These expenses used to be deductible from their income tax, but not anymore.  The act eliminates most itemized deductions and limits mortgage interest deductions.  If you are unfortunate enough to live in states with a state income tax, you may be a big loser.  The law also eliminates the $4,150 personal exemption.

Corporations are also the big winners with the new Republican tax law.  The corporate tax rate has been sliced from 35% to 21%.  The Act eliminates the corporate AMT which had a 20 percent tax rate that kicked in if tax credits pushed a firm’s effective tax rate below 20 percent.  Eliminating the corporate AMT adds $40 billion to the deficit.  The Act allows companies to repatriate $2.6 trillion held in foreign countries to avoid paying income taxes. They pay a one-time tax rate of 15.5 percent on cash and 8 percent on equipment.  The Republican platforms have always been designed to do away with welfare which is the health, happiness or fortunes of a particular person or group.  This tax plan transfers welfare from the neediest Americans to the wealthiest Americans and corporations, the groups that need it the least.

“There is nothing more deceptive than an obvious fact.” The obvious fact is you did get a tax cut.  Just not the one you were promised, and not for the stated purpose.  The deception, double-dealing or sleight of hand is two-fold.  On June 24, 2001, Republican President George W. Bush signed a $1.3 trillion tax cut which included rebate checks to most Americans of $300 up to $600 that were mailed out shortly afterward.  In 2008, due to deregulation and the Bush tax law, we saw the effects of the tax cuts when the Great Recession came rolling in with a bang.  We all know how that turned out.  How much did you lose?  Have you recovered yet?  The big difference between the Bush tax cut and the Trump TCJA is, with the Bush law the effects were delayed.  With Trump, the effects were immediate.  Once again, in both cases, the obvious fact is, “you got a tax cut” and rest assured, the pain is most definitely coming.

The first deception of the TCJA is, the tax cut is for the wealthy and corporate America, not for you.  Also, the Tax Cuts and Jobs Act, has not created any jobs and the administration knew that it would not create any jobs.  Both of these were part of the first deception that was hidden in the name.  The second deception is far more insidious.  It is not associated with the tax law but, has always been a cornerstone of the Republican agenda.  It is the most serious consequence of the Republican tax cut law, attack Medicare, Medicaid and other social programs.

The effects of the TCJA on the economic health of the nation is devastating and will only get worse with each year.  It does not take a rocket scientist to know that, if you lose revenues (taxes) and don’t cut expenses, you get a bankrupt nation.  In a Brookings Institute report released on June 13, 2018, titled EFFECTS OF THE TAX CUTS AND JOBS ACT A PRELIMINARY ANALYSIS ³, a dire picture of the Nation’s financial future is painted.  The report prepared by the Brookings Institute is very complete and is recommended reading to fully understand the total impact that, the TCJA will have on the nation.

Less than a year after the passing of the bill, Steve Mnuchin, the Treasury Secretary reported to Congress that the federal budget deficit for fiscal year 2018 had increased 17 percent to $779 billion. For October and November of 2018, the government saw a $305 billion deficit, a significant jump from the $202 billion it saw in the same period of 2017. The party of fiscal responsibility, the GOP has passed a tax plan that, according to the Congressional Budget Office (CBO), will create a deficit of $1 trillion in fiscal year 2019.  Over the next decade, the deficit will increase by another $1.9 trillion.  Other non-government agencies believe the actual number may triple that. This mounting debt must be paid.  The plan is for you, your children and grandchildren to pay it.

When reality hits, the only way for Republicans to stop the bleeding will be to cut spending and cut it drastically or increase taxes.  To increase taxes would be to admit defeat and Republicans never do that.  Plus, it has never been a part of their agenda.  But, cutting social security, Medicare, Medicaid, education funding, food stamps, Head Start, jobs programs and other social programs have always been the foundation of their platform.  And now, killing Obama Care is their new poster child.  Accordingly, to them welfare and entitlements are evil.  The poor and downtrodden are lazy or ignorant, even subhuman in the minds of these fine Christian pillars of the community.

Social programs stem from not just Christian principles but from FDR’s The New Deal.  Roosevelt understood that providing a lifeline was the key to a prosperous and booming nation.  These social programs, which include a free education, saved America from the Great Depression.  They have been a driving force in the growth of the American economy.  These programs have reduced the number of poor, increased literacy and expanded the middle-class.  The money spent on these programs has provided a greater return on investment than Republican tax cuts.

The Republican mantras of “we must cut entitlements” and Social Security is going broke are lies.  The Social Security Trust Fund is solvent and has always been solvent.  Due to its solvency, the federal government borrows money from the Trust Fund to pay for other government programs.  At the current rate of government borrowing coupled with deficits caused by the TCJA, the Social Security Trust Fund will be insolvent by 2034.

The Republican long term agenda which is to decimate the poor, shrink the middle class, destroy social programs and make the wealthy richer, for most civic-minded people,  is hard to understand.  But, when you consider the political math, the solution is plain as day.  The true Republican constituency, relative to the rest of the American population is few in number.  By most estimates, they are 1% of the general population.  This segment of the population has accumulated 35.5% of the wealth of this country.  When combined, with the wealth of the other 9% of the wealthiest Americans, one finds that a total of 75% of the nation’s wealth is in the hands of 10% of its population.  This is the class of the wealthy, majority stock holders in large corporations, the elite.  Their numbers are microscopic when compared to the rest of the population.  In a system where theoretically 50.1% rules, this elite class fears the loss of their power.  People in power dictate economic and tax policies and that ability is the last thing that they want in the hands of the majority of the people.  Entitlement and social programs protect and promote the growth of the lower 90% or non-elite populace.  Do away with these programs; keep the economic burden of the government on their backs and the weight will control the lower-class threat.

Entitlement programs are just that, entitlements.  They are called entitlements because monies are taken out of an employees paycheck by the government over the course of a lifetime, as a means of saving for medical insurance, disability and providing an income when a person reaches retirement age.  This is a legal and binding contract between the government and the American people.  Once you have paid money into an investment, you are entitled to receive your return on investment.  For example, if you paid a life insurance premium monthly for 30 years, at the time of death the benefit must be paid.  You are entitled.  That is the law.  Just because the management changes at the insurance company does not mean that the benefits change.  Just because the Republicans are in power does not mean that they can alter the contract and change or deny your entitled benefits.

Entitlement programs such as Medicare, Medicaid and Social Security are not going to bankrupt the government.  Sleight of hand tricks and deceptions like excessive military spending, bloated earmarks, a lack of fiscal responsibility and welfare tax laws that benefit only the wealthy and corporate America are treacherous and deceitful. They are the true causes of deficits, economic mayhem and oppressive wealth distribution in this country.  The Tax Cuts and Jobs Act of 2017 aka BILLS-115hr1enr is such a law, it will bankrupt this country and hurt a lot of people.

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Linked Documentation

1. Tax Cuts and Jobs Act of 2017 aka BILLS-115hr1enr
2. https://itep.org/we-crunched-some-numbers-to-show-what-tax-reform-for-working-people-really-looks-like/
3. EFFECTS OF THE TAX CUTS AND JOBS ACT A PRELIMINARY ANALYSIS 
4. The New Deal