Cathy McMorris Rodgers’ guest opinion “Out with the old, in with the new (tax code)” on April 17, 2018 (tax day), concerning the Tax Cuts & Jobs Act, focused on “celebrating” how this new law will help middle-class families.
While there will be some temporary benefits to the middle class in this new law, the congresswoman doesn’t provide critical additional facts. I believe our congresswoman has failed to identify who is actually “celebrating” this new tax law. It’s not the middle class.
The new tax law gives an enormous, permanent tax cut to corporations. This tax bill reduces the corporate tax rate from 35 percent to 21 percent. And American corporations that do business abroad will no longer be taxed by the U.S. on the profits they generate overseas. Is this tax change going to “bring jobs home” again?
McMorris Rodgers failed to mention that, under this new tax law, tax cuts for the American middle class will expire in 2025 – just eight years out, and thereafter will actually raise taxes on most U.S. households. And while these temporary “tax cut” years are in effect, an equal dollar amount of tax relief will be given to just the richest 1 percent of tax payers as will be given to the combined middle class of taxpaying Americans.
President Trump has structured many of his family businesses as unincorporated businesses (so-called pass-through entities), and it is no surprise that these organizations benefit from new, lower tax rates under this tax bill. Will he and his family benefit from this change? Enormously.
Primarily because of the huge reductions in tax payments by Trump family businesses and those of his “friends,” the nonpartisan Congressional Budget Office is projecting that this tax bill will add between $1 trillion and $1.5 trillion to our national debt. Many Republicans have argued for decades that national deficits are a threat to our “grandchildren.”
Speaking of grandchildren, when will this growth spurt to the national debt “force” cuts to Medicaid, Headstart pre-school programs, community college technical job-training programs, federal college grants and loans? Will “forced” cuts kill more federal boosts that give striving Americans a chance at the American Dream?
For middle-income Americans, how soon (in three or five or seven years?) will this massive increased debt “force” Congress to make cuts to their benefits (Medicare and Social Security)? Speaker Paul Ryan has repeatedly suggested that cuts will be necessary to these programs and others.
Do you recall President Trump repeatedly stating that middle-class Americans will be the primary beneficiaries of the new tax bill, and that he and his billionaire friends would see little or no benefit? He added that his buddies would be mad at him for signing this new tax bill. Rather, those billionaires are dancing in their counting rooms. To his wealthy friends at a Florida Christmas gathering, right after signing the tax bill on Dec. 22, our president shared, “You all just got a lot richer.”
The top issues concerning most Americans after President Trump’s election were health care, terrorism, climate change and crumbling infrastructure. Has the president listened? Congress tried but failed to abolish the Affordable Care Act. Mr. Trump denies climate change exists, and is attempting to reverse existing laws supporting cleaner air and water and reducing emissions and pollutants.
American’s real concerns are being ignored; the real impact of the new tax bill has been hidden under the guise of tax relief.
Cathy McMorris Rodgers’ guest opinion was misleading by leaving out the long-term effects of this tax “reform” on 99 percent of Americans. Who is celebrating? It’s not the middle class.
Tim Quirk is a retired tax attorney and a volunteer Certified Advanced Income Tax Return Preparer for the IRS’s Tax Counseling for the Elderly (TCE), a yearly program offered at local public libraries during tax season.
Subscribe to the Coronavirus newsletter
Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.