The Spoils

As of this writing, The Republican tax bill remains in conference - the Senate and House passed different bills, and so must reconcile them and re-pass an identical bill before it can be sent to the president to sign. The final text is therefore undetermined, and some of the things I'm going to mention here may not be in the final bill while others may appear that weren't previously in either bill. That being said, the specific provisions I'm mentioning are to be considered not on their own, but as part of a pattern.

There are a number of controversial provisions being considered. The one that is most relevant to me personally, as a once and hopefully future graduate student, would be the provision of the House bill that treats tuition waivers as taxable income, essentially raising the tax owed by several thousand dollars per graduate student. It would guarantee that graduate students, who have an almost uniformly low standard of living, would need to have some sort of independent means or take on a much greater debt to pursue their studies.

There is also the provision in both bills that eliminates the deduction for state and local income and sales taxes, which will primarily hit residents of high tax states (read the west coast and northeast) and high tax localities (read cities). But that isn't the entire story on state and local deductions, because while capped at $10,000, the property tax deduction has somehow survived - keep this in mind.

The Senate bill includes a repeal of the Affordable Care Act's mandate that individuals purchase insurance. Aside from being the umpteenth swipe at a law that has long been their bȇte noir, this provision would put a great deal of upward pressure on insurance premiums that continue to rise out of proportion to healthcare cost inflation.

The tax bills would eliminate current tax incentives that have helped develop the wind and solar industry in this country from a pipe dream to nearing large scale viability in less than ten years. Competing sources of energy, namely oil and natural gas, would benefit from the reduced competitiveness of a renewable energy industry that is coming on quickly but still finding its way. A larger proportion of our energy would be created by high-emission sources, accelerating a global trend of climate change that already seems out of control.

The Senate GOP, realizing how grossly over-budget its bill already was, decided to put an expiration date on individual but not corporate tax increases, as a budgetary gimmick. In a few years either the tax rates for individuals will return to current rates - which in light of the elimination of deductions and changes in how inflation is calculated would mean an individual tax increase for those making under 93,000 a year - or the Congress of 2027 will have to acknowledge the budgetary shortfall kicked down the road by this one. Neither eventuality is pleasant. Regardless, the corporate rate will remain lower in perpetuity, most of the benefit from which will be passed on to shareholders rather than workers.

On the side, the tax bill would allow ministers to use the power of the pulpit to endorse political candidates and maintain their tax-exempt status, turning communities of churches into tax-advantaged propaganda tools. Another addition being debated in conference would have the effect of making anonymous "dark money" political contributions tax-deductible, giving wealthy donors an even larger incentive -as if one was needed anymore - to put their fingers on the political scale.

I would invite the reader to take notice of who benefits from each of these changes. They are the wealthy, the oil and gas industries, large scale holders of property, politically-active churches, health insurance companies, shareholders (largely wealthy), corporations in general. The changes tend to take away from the less well off, those with difficulty affording insurance, anyone who lives on the west cost or in the northeast, renewable energy, college and especially graduate students.

These tax bills are, in effect, a transfer of wealth to people who donate to and vote for Republican campaigns from people who do not. The south and non-coastal West, the wealthy, corporations, insurance and oil companies, religious-right affiliated organizations, and rural and exurban areas, are all strongly Republican and all reap profound benefits. I have looked at these bills and attempted, in vain, to find some unifying principle or common characteristic of the groups who will benefit from them other than their simple political support for the Republican Party.

If these bills had significant merits in the form of broad social advantages or ways they could benefit the worst off in society to counterbalance what was taken, such a shameless devotion to ones own political supporters could - potentially - be excused. But this bill can have no such ancillary benefits. Employment is already below 5% and the sectoral composition of the American economy is determined by tastes, geography, and global markets, none of which are significantly altered by the bill. Rosy predictions of the economically dynamic, hyper-prosperous utopia to be achieved by the tax cuts are delusions of grandeur and amount to willful self-deception on the part of the congressional majority.

In spite of the obvious deleterious effects these bills have on the distribution of wealth, on the state of the already wobbly health insurance market, on climate change, on the budget deficit, on higher education, and on the political system, the congressional Republican Party has seen fit to essentially loot the losers and distribute the booty to keep its supporters happy. Not only that, but they have already acknowledged that the hole blown in the budget by such massive tax cuts will have to be covered by cuts to Medicare, Medicaid, and non-military discretionary social programs.

Those cuts would directly hit the worst off over the course of years, lowering their standard of living even as they face a looming tax increase when the individual cuts expire. I have heard a great deal from the Republican Party decrying class warfare in my time. It is, however, hard to give any other name to a policy like these tax bills. They are a large scale transfer of wealth from the poor to the rich, with just enough done for religious and parochial southern and western interests to maintain their support on cultural grounds.

It may be that growing up politically as a college student in the hyper-idealistic first days of the Obama administration has colored my expectations, but seeing a major piece of legislation constructed so cynically turns my stomach. Multiple Republicans have admitted on the record that the urgency to pass the tax bill came directly from the closure of donors' wallets in the wake of their failure to repeal the ACA.

The Republican Party speaks often about principles but it is operating like a party whose only imperative is maintaining power. Using the aegis of tax "reform" to fund giveaways to supporters at the expense of opponents is thuggish and irresponsible. The fact that doing so will have such inescapably bad effects on the society as a whole is something that they are either or ignoring or glibly explaining away on ideological grounds. This nauseating display of bad government has been inflicted on us for less than a year, but it already threatens to leave permanent long term effects.