The tax “re-arrangement”

It may be a bit premature to talk about the pending tax bill, because it certainly isn’t a done deal yet. The House and Senate need to negotiate the differences in their bills, and there are a few issues that may yet sink the whole thing considering the disunity among the Republicans. But my guess is that it will pass, if only because the Republicans need SOMETHING to point to out of this unproductive Congressional session.

But it is a bit much to call it “tax reform”. “Tax re-arrangement” (as in rearranging the deck chairs on the Titanic) might be a more accurate term. Yes, corporate taxes will drop, not that that makes much differences to huge corporations like Apple or GE who have long ago figured out tax dodges so that they pay little or no taxes. (Apple apparently has managed to pay as little as 0.008% on some of the profits it stashed in Ireland). Yes, there will be a modest cut for the middle class, and more for the wealthier, because, as I pointed out in an earlier post, the wealthy pay most of the tax in the nation, so mathematically any tax cut helps them more.

But that is hardly reform. There are still 75,000+ pages of special interest deductions, exemptions and loopholes in the IRS regulations, and as near as I can tell this tax bill does nothing about them. So it is hardly “reform”.

And of course, as popular as tax cuts are, in truth the nation needs a big tax increase, not a cut. The federal deficit this year is estimated to be $666 BILILON – yes BILLION.  That is how much new money we borrowed in 2017 to add to the $20+ TRILLION – yes TRILLION, thousands of BILLIONS – the US already owes.

To put that $666 BILLION in perspective, in 2016 the entire non-defense discretionary spending – everything the government spent to run all its departments and agencies and discretionary programs – was $600 BILLION.  And everything we spent on defense was $585 BILLION.

Democrats of course are outraged (they seem to be permanently outraged these days – it’s getting tiresome) that it may add $1 trillion to the deficit over the next decade. But somehow Obama’s adding $10 trillion to the deficit over his eight years seems never to have bothered them. Ah well, hypocrisy is never far away in Washington politics, in either political party.