Recently, Chuck Schumer and Nancy Pelosi, both high ranking Democrats in Congress, made the bold decision not to attend a meeting with Trump to discuss the GOP proposed tax bill. This was after Trump tweeted that a deal would most likely not be reached. Pelosi and Schumer have stated that they have chosen to work with other Republican in Congress instead in order to try to reach a compromise.
In response to the absence of Schumer and Pelosi, the President took photos next to two empty chairs with Pelosi and Schumer’s names written on the desk. In reaction to Trump’s photo, Pelosi said, “His empty chair photo opp showed he’s more interested in stunts than addressing the needs of the American people”.
Senate Majority Leader Mitch McConnell and Speaker of the House Paul Ryan both had a different reaction to Trump’s photo. They believe that Democrats should not have passed on the chance to go to the White House. “Democrats are putting government operations, particularly resources for our men and women on the battlefield, at great risk by pulling these antics,” said Ryan and McConnell. However, Ryan and McConnell have pulled similar antics during the Obama administration so their objection to the actions of Pelosi and Schumer is quite hypocritical.
The tax bill in question would cause some middle and lower income Americans to suffer monetary losses or in some instances, obtain minimal tax relief, while giving huge tax cuts to the rich, including Trump and his family. Therefore, this would raise the level of income inequality in the United States. The plan cuts the corporate tax from 35% to 20%, putting more money in the pockets extremely wealthy Americans and out of the pockets of everyone else. Consequently, there will be less money in the budget for public works and social programs. In fact, many corporations are already experiencing record level profits, yet the added revenue from tax cuts has not been used to hire more workers or increase wages.
Many argue that if the wealthy have more money, both wages and jobs will increase. However, historically the method of a trickle-down economy has failed more than succeeded. This is largely because wealthy Americans tend to save money or let it sit in banks, rather than spend the money that would increase the flow of money in the economy. The plan also lowers the income tax for the top wage earners from 39% to 35%, which allows the Americans that have the most money to keep the money for themselves.
Currently people can deduct their state and local income and property tax before paying federal income tax, allowing for people to pay less in federal taxes. Republicans want to remove this deduction, causing numerous middle income individuals to have higher tax bills. This particularly impacts Americans living in liberal states because these states tend to have high state income taxes to provide for social programs. Although this tax increase impacts all levels of income, it is most harmful to the middle and lower class who can not afford to lose these deductions.
To make matters worse, the Congressional Budget Office (CBO) had said that this plan will raise the deficit between $1 and 1.4 trillion over the next 10 years. Supporting this plan is hypocritical of the Republicans considering that when Democrats hold the Presidency or the majority in Congress conservatives vehemently argue that the deficit needs to be brought down and that the debt is killing the economy.
Moreover, the plan is part of a bigger strategy called “starving the beast”. This means that the GOP, by giving large tax cuts to the wealthy, will cause the deficit to rise and revenue from taxes decrease. Many Republicans argue that because of this tremendous debt, social programs should be cut. The CBO has also stated that after the first four years of the tax plan being put into action, lower and middle class Americans will suffer an increase in taxes. This is particularly troubling because this means the plan may appear to be a success until after the next election, which may allow candidates that support the tax plan to become elected under false pretenses.
In addition to raising the deficit in spending money, the plan allows Hedge Fund managers and investment bankers make millions of dollars and yet, because their earnings are referred to as carried interest, are taxed at a maximum rate of 15% rather than paying income tax, which would be taxed at 35%. This allows extremely wealthy people to get richer and robs the federal government of money that could be distributed to programs helping the poor and middle class.
The bill gives massive tax cuts to the rich, which will ultimately increase taxes on the poor and middle class and disproportionately harm the Americans living in more liberal states by issuing even more taxes.