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Tuesday, March 26, 2019

Reprinted with permission from DCReport.

The House tax bill is an all-out attack on the future prosperity of America, not that any of the major news organizations are telling you that in plain English. Lost in the dense bureaucratic language of modern news reports is the simple fact that the House bill takes from striving students so that the already rich and major corporations can have more.

This bill is a long-term disaster in terms of what economists call opportunity costs. That term refers to a benefit that a person could have received, but gave up, to take another course of action. This tax bill gives up the future wealth from investing in brainpower in favor of permanent tax cuts for the already rich and corporations.

This tax bill should be called the Intellectual Destruction Initiative Outrageous Tax Savings Act, a.k.a. the IDIOTS Tax Act of 2017.

Are we idiots?

What we need is more investment in education and, especially, education of the most serious and scholarly students. I have a name for what we need—the Intellectual Quality General Education National Investment University Scholarship Act or IQ GENIUS Act.

What will we tell our Congress, if anything, about this tax bill and the one being written in the Senate? Hopefully, it’s that we are not idiots and we want to develop more genius minds.

The House bill would eliminate a 2015 law that lets teachers who itemize deduct some of the money they spend on school supplies and materials not provided by their employers. In 2014, almost four million teachers deducted an average $254 each, IRS Table 1.4 shows. Nearly all of the deductions were taken by teachers whose tax returns, which can cover two people if married, had a total income of less than $100,000.

The IDIOTS Act also ends tax-free education benefits for the children of long-term college employees. The House GOP bill would eliminate Internal Revenue Code Section 117(d), which allows these benefits.

“Fifty percent of employees receiving tuition reductions for themselves or family members earned $50,000 or less, and 78 percent earned $75,000 or less,” according to the College and University Professional Association of Human Resources.

In simple terms, here is the bill’s message to the poorly educated person who works in the college cafeteria so that their child may attend college: “Tell your kids plan on a career in the cafeteria.”

Even worse is the plan to eliminate subsection (5), which allows “a graduate student at an educational organization… who is engaged in teaching or research activities for such organization” to get tuition waivers and stipends tax-free.

Taxpayer money now invested in developing knowledge would be shifted to giving massive tax breaks to heirs of the already rich and to the 3,000 corporations (out of 6 million) that own more than 80% of all the business assets in America.

And all so that couples with one family jet can afford, his-and-her private jets, like gambling mogul Sheldon and his wife Miriam with their twin personal Boeing 747s, as I revealed in my book The Fine Print. With their tax savings, the Adelsons would be able to upgrade to personal Airbus A-380s, those double-decker jetliners are built in France.

The most valuable asset in America is not factories. It is not formulas for making drugs or the algorithms that make the Internet work. Our most valuable asset is the gray matter between the ears of young people. A mind is a terrible thing to waste, but a wonderful thing to invest in, says an old slogan from the United Negro College Fund. Congress just doesn’t get it.

And the return on that investment rebounds not just to the individual, but to America and the world.  My proposed IQ GENIUS Act should be thought of as the 21st Century G.I. Bill for all who will study, study, study.

We should be investing more in young minds, from birth through the highest level of education that serious students desire, not less. That is what China and other countries with an eye to tomorrow are doing, while our Congress looks at today and yesterday.

And the way to recoup that investment is through taxes on the higher incomes of those with advanced educations. Some will make little, many much better than average incomes and a few will become as rich as the Adelsons – and by taxing their fortunes society gets repaid for its investment while at the same time growing ever more prosperous.

When the American education system was developed in the late 19th century it focused on reading, writing and basic arithmetic. It was designed to produce workers for the industrial era–in good measure compliant drones who would do as they were told. It was also cheap, especially when most teachers were women because other job opportunities for women were few and the pay was miserly.

But the economy of today and tomorrow depends on a host of sophisticated skills–creativity, thinking outside the box and critical judgment–that were not so valuable in the Industrial Age. That costs more, but it also produces bigger rewards.

Only by rigorously developing critical thinking skills, a deep understanding of mathematics and statistics and recognizing the nature of science can America continue to prosper. Intense education is the fundamental building block of America’s economic future. Keep in mind that arguably the most successful investment taxpayers ever made, the G.I. Bill, helped produce the enormous increase in wealth today compared to 1940. Indeed, we would have more wealth had more GIs been able to take advantage of the bill, especially African American GIs and women who were clearly discriminated against in its implementation.

Header image by Sarah Wasko / Media Matters

 

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17 responses to “Why The House GOP Tax Bill Is For Idiots”

  1. Dominick Vila says:

    The latest GOP tax “reform” proposals represent the values that conservatives are trying to conserve, which range from unadulterated greed, to prejudice, immorality, and inhumanity. In addition to the damage that these proposals will do to the Treasury, they guarantee prolonged dependence on deficit spending, borrowing, accumulation of debt, potential inflation and higher interest rates. Not surprisingly, the alleged reform depends on budgetary cuts to programs like the ACA, MEDICAID, Education, the environment, and every program designed to help the poor to pretend its goal of corporate welfare and gifts to the wealthiest Americans is being offset by budgetary reductions, and a rosy scenario of unprecedented economic growth. It didn’t happen when President Reagan promised a trickle down scenario and fiscal responsibility, and it is not going to be any better this time. Plans that tax working families, but eliminate the estate tax, and reward investors (foreign and domestic) as well as very profitable corporations, are just a gift to the top 1%. The top tax rate on most investment income (capital gains and dividends) tops out at 23.8%. Well below the rates applied to salaries and wages. What is being proposed is Robin Hood in reverse, and most Americans don’t seem to mind.

    • dpaano says:

      Trickle down economics didn’t work in Kansas either, but apparently, Republicans don’t learn their lessons well! They just keep doing more of the same even when it clearly shows that it doesn’t work!!!

    • Independent1 says:

      Dominick, the only change I would make is your last phrase: It should read: “and most Americans dislike or hate it.”

      See this from the WaPo:

      The Republican tax plan is deeply unpopular — and unimportant to many Americans

      Some excerpts:

      The Kaiser Family Foundation asked
      Americans what Congress and the president should focus on. What’s
      important to address, the survey asked: Tax reform? Reauthorizing the
      children’s health insurance program (CHIP)? Funding the recovery from
      this year’s hurricanes?

      More than 6-in-10 Americans said CHIP reauthorization and hurricane
      recovery should be a top priority. Only 28 percent said reforming the
      tax code should be.

      Asked about the tax plan, though, the numbers for Trump were bleak.
      While a third of Americans approved of his handling of taxes, only a
      quarter approved of the Republican proposal. That includes only 60
      percent of Republicans.

      https://www.washingtonpost.com/news/politics/wp/2017/11/15/the-republican-tax-plan-is-deeply-unpopular-and-unimportant-to-many-americans/?utm_term=.ce05ccca84d2

      And what’s a bit strange about the GOP tax plan is that when it’s fully implemented in 2027, the people hardest hit by the plan will be those in the upper 5-20% of income earners; according to investopedia, in order to be in the upper 10%, you need to earn 133,000+; in the tope 5% – 215,000+ and in the upp0er 1% – 465,000+. I couldn’t a good source for what the minimum income would be for a 20% but I’m guessing it must be around 60,000+

      If the above is the case, and I believe the salaries of most of our legislators are around 200,000 or a little less, it’s actually this group of people, those below the 215,000 of 5% and maybe the 60,000 cut off of 20% that will actually see their after tax income drop over the next 10 years.

      See this chart. https://uploads.disquscdn.com/images/e9c08ddc7d7435754ed0663cc1b8cd1f0869892d8044168a11b0a89452f92e41.png

    • Independent1 says:

      Here are some updated charts that give a bit more explanation to what the graph I posted last night shows. If these charts are now correct, then last nights graph is a bit misleading – it doesn’t really look like the people earning in 5 to 20 percent quartile will take the income hit that last night’s graph appears to show.

      See the charts from a later WaPo article:

      The Trump tax plan is much worse than you thought. A new analysis confirms it.

      https://uploads.disquscdn.com/images/ca1d357266a117a52b2699aa9331c4b58fcd576fec6c165c7dfb54c64b8a3f9e.jpg

      https://uploads.disquscdn.com/images/04c0125afc3aa930b30d0eb5bcdcf4188d1e90ef8eb3699b36b52720ef5a4202.jpg

      https://www.washingtonpost.com/blogs/plum-line/wp/2017/11/21/the-trump-tax-plan-is-much-worse-than-you-thought-a-new-analysis-confirms-it/?utm_term=.a3dd801e4cdd&wpisrc=nl_popns&wpmm=1

      But any way you look at it, the GOP tax plan is a disaster for the middleclass and America’s economy and long term viability.

    • Independent1 says:

      And the GOP’s skullduggery in crafting this white elephant it calls a tax bill is coming even more to the light as reported in this article from Jennifer Rubin who seems to be morphing from a right-wing columnist into at least a little more in the center as she sees just how corrupt Republican politicians have become:

      A Republican ‘win’ on the tax bill will actually be a loss
      Some excerpts:

      Democrats are already polishing their campaign themes, arguing that the middle class will get hit twice — once by the tax bill and again by the cuts in federal spending that will be needed to pay for it. (“At the New Hampshire dinner, Rep. Tim Ryan (D-Ohio), who just months earlier had warned his party not to rule out a tax plan, described a Republican Party that would put suburban and working-class taxpayers in hock.”) Republicans face two additional issues — the real cost of the bill and the meager economic results it is likely to generate.

      As to cost, Mick Mulvaney, director of the Office of Budget and Management, has no real answer to the argument that the tax bill is using a phony sunset provision to disguise its actual cost. On “Meet the Press,” there was this exchange:

      MULVANEY: We’re using reconciliation so that we only need 50 votes in the Senate instead of 60. In order to do that the certain proposals can only have
      certain economic impact. And one of the ways to game the system is to make things expire. The Bush tax cuts back in early 2000 did the same thing. They supposedly would expire after nine years. What we tell folks is this is if it’s good policy it will become permanent. If it’s bad policy it will become temporary. That’s just the way that it is. So this is done more to force, to shoehorn the bill into the rules than because we think it’s good policy.

      ANDREA MITCHELL: Isn’t that an admission though that it’s a gimmick. You’re saying it’s a $1.5 trillion tax cut. The impact on the deficit. But in fact, it’s, according to most analyses, $2.2 trillion.

      MULVANEY: Well, not most analyses …

      MITCHELL: Well, a non-partisan analysis. And the fact is that you’re squeezing it into these rules. But you really do intend for it to be extended down the road which will explode the deficit even farther … We’re not taking a
      political point of view here. We are actually going by nonpartisan groups like the Committee for a Responsible Federal Budget, all the impact on the exploding deficit which will impact future generations.

      In addition, the $1.5 trillion limit on debt expansion in the budget assumes billions of cuts in entitlements — something President Trump said he would never do and something moderates such as Sen. Susan Collins (R-Maine) have said they won’t allow. The explosion of debt thatRepublicans will unleash will not only be a drag on growth but also exert pressure to make cuts in both defense and domestic spending.

      Moreover, the premise of the bill — we need to jump-start the economy to
      create jobs — is flawed. We are already at “full employment,” and the bill’s incentives to reinvest in the U.S. economy make little sense. For one thing, U.S. businesses already are sitting on mounds of cash; for another, U.S. businesses — as senior economic adviser Gary Cohn learned — are not keen on using any tax savings to hire more workers or pay them more.

      https://www.washingtonpost.com/blogs/right-turn/wp/2017/11/20/a-republican-win-on-the-tax-bill-will-actually-be-a-loss/?utm_term=.0a5e290917b2&wpisrc=nl_popns&wpmm=1

  2. ivory69690@yahoo.com says:

    11-20-2017 // the pathological liar told all he cares for the people and will give all tax breaks & cuts . he lied as all ways he cares for the PERSON AS IN ONE JUST 1 HIMSELF !1 well RUMP 45 is showing his over the top of his toilet bowl childish tweeter clown mode ! one has to ask with RUMP 45 ever grow up ? I’ve change the clowns name from DUMP 45 TO RUMP 45 . maybe the name should be combined ?DUMP RUMP 45 fitting to do what’s best for the USA & WORLD ! he will fall down in the toilet bowl (FLUSHED IF ALL ARE LUCKY) where he belongs with all his brain dead followers also his CULT , KLAN STAFF and all that follow the DUMP RUMP 45 CLOWN SHOW !!! yes the Gang Of Pinheads tax bill is for idiots its said . fitting for seem the idiots in the people but the problem of every thing these days in the white house . so who’s to blame ? YOU THE PEOPLE !! I set back and feel you all did this to ourselves REEK WHO YOU VOTED FOR !! and put in the house . one can say you deserve all the DUMP RUMP’S 45 B/S the saddest part is you the brain dead followers took so and too many good people in the country down the DUMP RUMP 45 toilet bowl to the sewer SWAMP . is there a way out ? yes and hopefully it will be soon enough before the MORON destroys too much of the USA & world .Mueller should be able to take care of a lot of the CULT involved . if so not with out a big mess left behind of slimy scum . will it be too late ? maybe not but a lot of fixing will be needed . first fixing that is needed badly is to put people in office that want to work for more then just 1 & 2 percent of the greedy rich people . even it it be that one can be put in office that work for 50 % of the people that’s a lot better then just 1 & 2 % of the people

  3. Gerry Francis says:

    When FDR put people to work during the great depression via the CCC, they had money to spend which grew the economy. Reagan’s trickle down worked when he increased government spending and grew the national debt from 997 billion to nearly 3 TRILLION. The only thing that creates jobs is demand. Put money in consumers pockets and there will be demand and the rich will get richer anyway. I’d love to know exactly how Mr. Dufuss in the White House plans to spend the money his companies will save to create jobs. As my grandmother would say – “They’re full of what the bull left in the gap” and we all know what that is.

  4. ivory69690@yahoo.com says:

    White House open to removing health mandate repeal from tax bill

    President Trump’s budget director said it would be up to House and Senate negotiators to figure out whether to include it DUMP RUMP 45 put this in the bill just so thy could try to look good and get the bill passed by taking it out . its the DUMP RUMP 45 fraud CON & SCAM and now he watches how many fools in office believed his pathological liar DUMP RUMP 45 !

  5. Richard Prescott says:

    Setting up a population to be separated the way the GOP tax plan does is asking for one thing and one thing only.
    In the future, when desperate people are so tired of suffering for the ultra rich and corrupt politicians they will revolt.
    The GOP is selling America’s future for short term and shorter sighted wealth redistribution to the people who need it the least.

  6. johninPCFL says:

    This is just the GOP trying to create a serf class in the US.

  7. dpaano says:

    First of all, I would like to say that I got my education through the use of the GI Bill, and I couldn’t be more thankful that it was available to me when I left the active service! Secondly, it appears that the richest in this country most likely GOT that way using our hard-earned taxpayer money! They built their wealth from opening companies, giving people jobs, and selling products…..all requiring, in some form, taxpayer money! Many of them, especially the larger corporations (i.e., GE, Boeing, etc.) don’t even pay ANY taxes whatsoever as it is, so why is it so important to lower their tax rates? They pay big money to accountants and ex-IRS agents to find all the loopholes in the current tax rules, and they pay nothing while the rest of us pay for them to continue in business, making more and more money off our backs! Sorry, but I personally don’t think they deserve a tax cut…..if anything, they should take away all the many loopholes in our current tax rules so that they don’t get away with paying nothing!! It’s unfortunately that the middle class and below don’t have money to pay for high-priced CPA’s to find all the loopholes that would save THEM any money! I guess that’s just the way it works! Until corporations start paying their fair share of taxes and quit using ridiculous write-offs that are buried in the current tax plan, they should get NOTHING in the new tax plan!

  8. 1standlastword says:

    With a failed and weak Democratic party– it is as if the country has a governmental system based on “one-party-rule”. What we are witnessing with this tax proposal is the core values of the Republican party that is completely dedicated to the well-to-do-well- heeled!

    Their modern conservative core philosophy is: Since The People have-so-little and make-do-so-well-with-so-little they don’t deserve much!!

    With the GOP this philosophy will “never-never-never” change!!!!!

    Observe: the Don Juniors of America will get to bring home their Big Game Trophies and the Trumps of America will get to have the taxpayers cover the expenses for their private jets.

    The People; on the other hand, will get more slave-wage jobs and create more live children to become dead soldiers used up like cannon fodder to fight the rich man’s permanent wars; all of course under the agenda of keeping America safe and free for the Barrons and Tiffanys of America. (America is NOT safe for the work-a-days, living without basic necessities like healthcare, education, retirement savings, adequate food and housing is not safe)

    Now this should make “all” Americans hopping mad!!

    But it doesn’t!

    In fact, it gives 40% of conservative Americans a warm and fuzzy feeling….

    • Sand_Cat says:

      It’s not just the GOP’s dedication to the rich; you don’t have to read many of the comments here or quotes from GOP leaders to know their very-close second priority is punishing the poor, when that aim does not exceed even helping the rich.

  9. Sand_Cat says:

    What a surprise!

  10. That slogan about the mind being a terrible thing to waste never sunk in for any of those associated with the GOP. This is a body running on the fumes of some vestigial traces of an intellect which all humans have been granted by the Creator. However, what vestiges remain amount to no good in the long run.

    And I’m speaking not about raw intellect characterized by a storehouse of an abundance of facts driven by self-centered impulses, and which Baha’u’llah equates with what He terms “Satanic Knowledge”, as opposed to “Divine Knowledge”.

    Rather, the knowledge He is referring to is a knowledge based on the centrality of a saintly character and noble sentiments, whereby there is a balance of wisdom and insight, tempered by a sense of empathy and humility to use the intellect for the benefit of all rather than for a few privileged individuals as propounded by elitist politicians and their self-centered ideologues.

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