Congress is poised to pass a piece of legislation that will amount to a $1.5 trillion tax hike for Americans who don’t have trust funds, silver spoons or monocles. No one knows what is in the final bill because Republicans have added more changes than Kim Kardashian’s plastic surgeon, but luckily The Root always has a plug.
We decided to explain the tax plan in simple terms easy enough for those of us who don’t employ a team of accountants to understand.
What exactly is this bill?
It is what I like to call “reverse socialism.” Like Bizarro Robin Hood, it steals from the poor and middle class and hands over the loot to corporations and the wealthy. It is simultaneously the biggest tax cut and biggest tax increase in American history.
How is that possible?
Imagine working for minimum wage at a company that is making a huge profit. Republicans believe that, if that company paid less in taxes, its owners would take their increase in profit and use it to either hire more workers or pay their current workers more. It is the basis for the GOP’s long belief in the myth of “trickle down” economics.
Sounds legit. Why do you call it a myth?
Because giving to the top and waiting for what was given to trickle down to the poor has never worked in the history of mankind. Most corporations use loopholes and trickery to never pay the effective tax rate. This is their right because the main goal of any business is to make as much profit as possible. But even when their taxes are lowered, corporations don’t suddenly morph from being free-market capitalists to well-meaning Marxists and redistribute their newfound wealth among workers. They pocket it.
Let me ask you a question: If you received a raise tomorrow, would you go to the grocery store and tell the cashier that you’re willing to pay more for milk and bread?
Hell no! But what does this have to do with the tax bill?
Because that is what this tax bill does. The biggest tax breaks go to the wealthy and to corporations. The people living below the poverty line barely get a break at all, while those making between $500,000 and $1 million get the biggest break of all. Republicans call it “investing in the economy.”
Where will the money come from?
The poor and middle class. According to the Pew Research Center’s 2015 numbers, people making under $500,000 pay 61 percent of the income taxes in America. The Republicans plan to borrow the “investment money” from you, flip it and give it right back ... they promise.
But you said trickle-down economics doesn’t work. What if they don’t give it back?
Why are you always bringing up old shit?
Sure, this giveaway to corporate interests will add $1.4 trillion to the deficit, but haven’t you ever heard the saying: “It takes money to make money”? Whenever anyone tells you that, they’re always referring to your money.
But I thought they were concerned about the deficit.
Republicans are like the husband who complains about how the light bill is keeping him in the poor house, but who goes to the strip club every Friday night and makes it rain. Conservatives fancy themselves as “deficit hawks” when it comes to Social Security, welfare, Medicare and health care, but will make it rain on the big-booty donors and lobbyists willing to shake their titties in their campaign-collection Champagne rooms.
But how will this affect me?
Trust me, if you are poor or middle-class, here’s what will happen:
- It will kill health care. Rather than repeal the Affordable Care Act, the bill removes the individual mandate to buy health insurance, which is the mechanism the ACA used to keep health care premiums low. Premiums will rise, making the individual market too expensive for the poor, unemployed or entrepreneurs. The Children’s Health Insurance Program already ran out of funding, and Republicans say they will attack health care next.
- It is the death knell for “entitlements.” Republicans have already pledged to correct the deficit increase by restructuring Medicare, Medicaid and Social Security.
- Welfare and community programs are next. House Speaker Paul Ryan (R-Wis.) promises to fix the mess they will have made by correcting “anti-poverty programs” in 2018.
- The rich get richer; the poor get screwed. This bill is essentially a transfer of money to the wealthy. Remember what I said about the people making less than $500,000 paying 61 percent of the income taxes? Well, under the new law, those making more than $500,000 will receive the lion’s share of the tax breaks, adding to wealth inequality.
So what can I do about it?
Do you have a few-hundred-million dollars lying around? Also, you’re probably going to need to register as a lobbyist and set up meetings with Republican lawmakers. If you could somehow give them more money than Exxon, Comcast, Walmart, the banks, the auto industry and every company on Wall Street combined, perhaps you could convince them to vote in the interests of the American people instead of major corporations.
Wait, shouldn’t you be telling me something about the importance of voting or how to call my senator? I thought you said my vote counts?
It does, but not that much.
But we live in a democracy, not an oligarchy! This is America!
I know. Can’t you feel it getting great again?
Trust me, they’re working on it.