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OpinionEditorial

New tax code a giveaway to richest Americans

The GOP has chosen to defy the middle class.

President Donald Trump, flanked by Republican lawmakers, celebrates

President Donald Trump, flanked by Republican lawmakers, celebrates Congress passing the Tax Cuts and Jobs Act with Republican members of the House and Senate on the South Lawn of the White House on Dec. 20, 2017, in Washington, D.C. Photo Credit: Getty Images / Chip Somodevilla

Besieged by opinion polls showing voters already disapproved of the $1.5 trillion Republican tax plan by 2 to 1, and knew how lopsidedly its benefits flowed to the wealthy, the GOP made it worse. In the final negotiations between the House and the Senate, Republicans increased the giveaway to the richest Americans, lowering the tax on earnings of more than $500,000 from 39.6 percent to 37 percent and slashing tax bills for large-scale real estate developers.

It’s as if the GOP, accepting it must pay a huge penalty in lost popularity with average Americans for this travesty, decided to get everything possible for the party’s donors.

Tax rates and rules are never set in stone, and every national election is in part a referendum on which way they ought to move. President Donald Trump and Republican majorities in Congress were elected to deliver tax reform that would simplify the system and give money back to the middle class. With the passage of the Tax Cuts and Jobs Act, they have mostly failed to deliver on that promise.

Promises not kept

This plan does not reduce the number of tax brackets, as Trump promised. It does not, for most families, simplify the filing process, as promised. It does not close the “carried interest” loophole that allows hedge-fund millionaires to pay taxes at a lower rate than secretaries, as promised. It does not put much money back in middle-class pockets nationally, and does not put money back in middle-class pockets permanently, as promised. And it is projected to add $1 trillion to the national debt that Trump vowed to eliminate.

To understand the GOP’s priorities, we need only understand this: The cut in the corporate rate from 35 percent to 21 percent is permanent, and will take 60 senators to change. The much smaller cuts to personal rates expire in 2025, and will take 60 senators to extend.

The top 1 percent of taxpayers will split $61 billion in cuts in 2019, according to Congress’ Joint Committee on Taxation. The middle 50 percent of taxpayers will also split about $61 billion in cuts that year. This bill rewards wealthy taxpayers 50 times as much as middle-class ones.

Look out, Social Security and health care

Why did Congress create a cut for the personal rate of the wealthiest, but not a higher deduction for local property taxes the middle class in New York and elsewhere desperately needs? Why, at the last minute, did Congress create a cut for real estate developers, but not a higher deduction limit for state income taxes the middle class in New York and elsewhere desperately needs? The moves could force big cuts to spending priorities like education and health care as taxpayers, pressed by the loss of deductions, cannot afford the state and local taxes that fund them. And House Speaker Paul Ryan says deficits caused by this plan will demand cuts to Medicaid, Medicare and Social Security, programs so many Americans rely on.

The GOP made these choices because it has chosen to defy the middle class — and to attack high-cost states like New York that pay the lion’s share of federal taxes.

If this only costs Republicans their popularity, it will merely be a regrettable move. If it costs the nation, and New York in particular, their prosperity, it will be an unforgivable one.

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