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GOP Tax Reform: The Closer One Looks, the Worse It Gets for Public Education… AND Democracy

December 23, 2017

Thomas Edsall’s weekly NYTimes column on Thursday offered an overview the recently enacted GOP tax reform legislation, drawing heavily on a critique of the tax bill by a team of 13 economists, a 30-page document called “The Games They Will Play: An Update on the Conference Committee Tax Bill.” The games mostly involve the creation of loopholes galore that will benefit the top .1% of the population to the detriment of the rest of the population and include several embedded elements that will put in place many economic policies that have been on the GOP wish list for decades. The games also involve specific provisions that will benefit members of the Senate who purport to be deficit hawks and/or guardians of the open political process, members whose core principles fell by the wayside when the bill was passed without any hearings or analysis with a price tag that will add over $1,000,000,000,000 to the deficit. But, as noted in earlier posts in this blog and countless analyses in progressive blogs, the deficit hawks will wake up shortly and determine that “the only way” to close the gap is to introduce “entitlement reform” at which point the runaway costs of Medicare, Medicaid, and Social Security will “have to be addressed”.

One element in the long list of particularly egregious elements of this hastily written and adopted law that seemed especially troublesome was this:

Restriction on state and C local tax deduction — consciously vindictive imposition of double taxation on citizens of certain Democratic states; corporations and pass through businesses, the darlings of the Republicans, still get to deduct those very same taxes in full.

A translation for those who are not wonky about revenue for public education or attuned to the vindictiveness of the GOP: this restriction on State and local tax deductions will hurt those who live in– and especially those who own houses in— so called “high tax States”. Those states are NY, NJ, CT, CA— ones that are reliably “blue”, which is why this de facto penalty is “consciously vindictive”. But the penalty is also a de facto penalty to public education funding and the funding of middle class government jobs in the public sector… jobs like teaching, social work, public transportation operators, trash collection, and regulatory oversight positions. The fact that many of those jobs are public sector union jobs underscores the vindictiveness of the law. And what could possibly be the justification for allowing “corporations and pass through businesses” to retain this deduction… unless, of course, those “corporations and pass through businesses” happen to be major donors of the GOP.

The net effect of this particular element of the “tax reform” bill will be a diminishment of revenues for state and local governments and a resulting diminishment of the effectiveness of government at those levels. This notion of “starving the beast” is NOT accidental. It reflects the ultimate desire of the GOP to “run government like a business”. Unfortunately, businesses do not operate democratically. Indeed, the way this bill was passed seems remarkably similar to the way business policy is written and adopted. A group of high paid executives assemble in a room and write policy that will favor the shareholders at the expense of workers and the shareholders adopt it based on faith…. and as long as their faith is reinforced by ever increasing profits they will be satisfied.

The shareholder in this analogy are the .1% who make huge donations to the GOP, donors who have no desire to see democracy function effectively or see economic justice prevail. After years of seeing their fortunes eroded by the government they are now in full control… and their bank accounts will swell unabated.

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