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Blue America Gets Richer

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Blue America Gets Richer


Reprinted with permission from Creators.

“Trumpcare is really a tax break for the rich, not a health care program,” Sen. Chuck Schumer of New York said about the Republican House bill to decimate the Affordable Care Act. He was right.

Sen. Rand Paul, meanwhile, panned the bill for not cutting those taxes fast enough. “It keeps the Obamacare taxes for a year,” the Kentucky Republican complained.

It’s old news that Republican plans to basically kill Obamacare would hit Trump country the hardest. In Kentucky, for example, Obamacare brought coverage to a half-million people (out of a population of 4.4 million) — with 4 in 5 joining the expanded Medicaid program because their incomes were so low.

But there’s a flip side to this story. This upward transfer of wealth would help already-rich regions get fatter. And few would do better than Schumer country.

New York City accounts for less than 3 percent of the nation’s population but 12 percent of individuals with at least $30 million in net assets. And that’s not including the fabulously flush suburbs.

The House bill would vaporize the taxes that pay for Obamacare. Half the value of these tax cuts would go to million-dollar-plus incomes. The percentage of New York state tax returns reporting million-dollar incomes is four times that of Kentucky.

In America, stock ownership is highly concentrated among wealthy households. Thus, the benefits of the postelection stock market rally have gone disproportionately to them. As for real estate values, the biggest price gains have favored expensive properties on the coasts, The Wall Street Journal reports.

Republicans are pushing for deregulation of the financial industry. History shows that when Wall Street is let off the leash, speculation goes on a romp and the little people get rolled. In the interim, a lot of financiers get quite rich. And where do those financiers hang out? Not in coal country.

Tax cuts, bubbly home prices, fattening stock portfolios — thy name is stimulus to select local economies. That’s where folks buy their luxury cars, Italian tailoring and spa treatments. Taxing the above is how most states fill their coffers.

You can argue that robust spending in one part of America can trickle down to other places. But there would have to be an awful lot of trickle to make up for losses in health care subsidies worth thousands of dollars to less affluent Americans.

The House health care plan would shift $370 billion in Medicaid costs to the states, according to the Center on Budget and Policy Priorities. Rich states could steer some of their residents’ federal tax cuts toward making up for these losses. They could care for their own people.

Some progressives might find this discussion morally wanting. Point is, the rich blue states could use their rising wealth to further the progressive agenda without having to go through the right-wingers now running Washington.

Recall California Gov. Jerry Brown’s response to Trump administration threats against a space program that monitors climate change. “California will launch its own damn satellites,” Brown said. That’s the spirit.

Another point is that the federal income tax is unfair to the generally liberal — that is, richer — parts of the country because it ignores the local cost of living. Thus, $150,000 in Conway, Arkansas, gets taxed the same as $150,000 in San Francisco. That’s why many call the federal income tax “the blue state tax.”

Besides, if the poor parts of America resent the rich parts for sending them health care, what can you do about it? In blue America, you make the best of your situation; that’s what. And frankly, your situation is not bad, not bad at all.

Froma Harrop

Froma Harrop’s nationally syndicated column appears in over 150 newspapers. Media Matters ranks her column 20th nationally in total readership and 14th in large newspaper concentration. Harrop has been a guest on PBS, MSNBC, Fox News and the Daily Show with Jon Stewart and is a frequent voice on NPR and talk radio stations in every time zone as well.

A Loeb Award finalist for economic commentary in 2004 and again in 2011, Harrop was also a Scripps Howard Award finalist for commentary in 2010. She has been honored by the National Society of Newspaper Columnists and the New England Associated Press News Executives Association has given her five awards.

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  1. Aaron_of_Portsmouth March 15, 2017

    There should be no doubt that both the “Blue” and the “Red” have major flaws—the difference is that one group at least tries to assume a posture of concern for humanity, even while accruing much wealth in the process, thus contributing to the widening gap between the rich and the poor. On the other hand, the other ideological group in America doesn’t even attempt to hide its disdain for the poor, while openly exulting in raping Americans in order to improve their portfolios.

    Oddly, the poor in the “Red” group, up to now at least, have been content to be on the bottom rung of society’s economic ladder, to the point of vigorously supporting legislators of a Party, whose unstated mission, yet obvious actions, is to maintain a gaping chasm between the hoi polloi and the hoity-toity—a most perplexing psychology on the part of these generally more deprived members of society. One might wonder to what extent the effect of having a “white” outer integument contributes to such a distorted outlook and an affection for a Party which thinks of their disadvantaged supporters as merely cannon-fodder and sees such supporters as voters with “R” stamped on their foreheads, like some fashionable tattoo.

    Clearly, one group acknowledges in its body-language a desire to lean towards the necessity of fairness and reciprocity, and the other is steadfastly committed to walking backwards towards a feudalism that is utterly oriented towards maintaining divisiveness on every level.

  2. Mama Bear March 16, 2017

    Here is how it goes:
    1. Republican government preaches “tax cuts and states rights” cutting taxes as they preach.
    2. State Republican government preaches tax cuts and …oh, yes, cuts taxes to “programs” …like schools, roads, etc. and passes it along to cities/towns.
    3. Cities have no budgets for schools and certain other things so they raise taxes to “help”….but it is never enough and homeowner gets hit with increased property taxes (mine doubled when Kasich became governor) to fund the public schools and increased sales taxes to pay for roads, etc.
    Tax cuts? Depends on who is doing the talking.

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    The first budget and tax reform should be that for every dollar a state sends to Washington they should get a dollar back in services, grants and revenue sharing. the blue states send about $1trillion more than they receive back. Yet the red states think I should apologize to them for being motivated to get ahead.

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