GOP Tax Bill is Even Worse Than We Think

Yves here. This nightmare of a tax bill just passed the Senate, and we’ll learn more about what was actually in it in the coming days since a lot of pork to buy particular votes was thrown in at the last minute. This Real News Network segment gives an overview.

AARON MATÉ: It’s The Real News, I’m Aaron Maté. Senate Republicans say now have the votes for what would be a historic tax bill and it would be historic for many reasons. It’s been called the largest ever transfer of wealth to the very top in U.S. history, and it’s also been called the largest ever US tax increase. That’s because while corporations and millionaires will benefit the most, some 24% of the country would see their taxes actually go up. All tolled, the measure would add $1 trillion to the federal deficit. I’m joined now by James Henry, investigative economist and lawyer, senior advisor at The Tax Justice Network.

So James, by the time many people see this interview, it’s quite likely that this tax bill will already have passed. If so, what have the Republicans done here?

JAMES HENRY: Well, we don’t know in particular because they’re still writing the damn thing. I mean, this is Friday evening and you are probably going to run this on Saturday, after they pass it, or don’t pass it, but they’re literally still making it up. In fact, Senator McCaskill of Missouri, to find out what is in the final bill had to go to a K Street lobbyist, and the lobbyists on Kay Street in Washington are notorious for writing these bills, and she came up with a long list of about 30 amendments that they were proposing that the Democrats have never been told about.

This whole thing has been written in secret. There have been no hearings. It’s the largest tax bill in 30 years, and yet you can smell a rat here because of the way the Republicans are going about this, holding negotiating sessions with their own Senator Corker on the floor of the Senate. Sticking in provisions at the last minute to favor parochial school tuition. It’s just a comedy, if it wasn’t so sad.

This is indeed one of the largest wealth transfers to the top 5% of the country. As far as we know at this point, first of all the bill provides for a deep reduction in the corporate nominal income tax rate from 35% to 20%. Most big companies don’t pay that. They have a lot of their assets offshore but they’re going to be able to continue to play offshore tax games and many of them are going to benefit substantially for the reduction in tax that applies to the 2 trillion offshore that they’re going to try to bring back.

Secondly, this does nothing about a host of problems we’ve identified like carried interest. It does nothing to really upgrade the quality of tax enforcement. It continues what’s called “the pass through treatment” and expands that tax treatment for many businesses and individuals.

So on the whole, the analysis that we’ve been able to do so far, and this is going to literally take weeks to redo this after we get the final details, shows that at least 70% of the benefits of this bill go to the top 5%. Basically, the donors to the Republican Party.

AARON MATÉ: Right. The number I saw from the Tax Policy Center was 80% of the benefits go to the top 1%. What about the middle and lower classes? How is it that a, what’s billed as a $1.5 trillion tax cut will actually increases taxes for so many people?

JAMES HENRY: Well first of all, the tax rates for individuals will be phased out. Any changes in those tax rates for individuals will be phased out after 2025, after which they will begin to go up. Because we expect to see a trillion dollars in added debt from this bill, they certainly will have occasion to do so.

Second, just the way the bill is written. There are a lot of deductions like mortgage interest and the state and local income taxes that many middle class people take advantage of. We just don’t know how those will work out but it’s quite possible and quite likely that the actual after tax effects for millions of individuals will be negative. So, what is absolutely clear is that the beneficiaries of this bill are mainly the top 1%.

AARON MATÉ: Can you give us just some micro-examples of how say, a lower or middle class person could be impacted? I’ve seen people just in my Twitter feed complaining about what this means for them, especially freelance workers, people who work from home. Talking about deductions that they rely on, are going to go and what the income that they take home is going to be way less than it is now.

JAMES HENRY: Well, this is going to affect lots of people in very, very different ways depending on the situations because it basically gets rid of a lot of the itemized deductions that people have been able to count on for self-employment in the interest of supposedly standardizing the income tax. That’s going to introduce a lot more inequality in the tax system. It is going to affect many middle class people who are working as independent contractors.

Secondly, one of the big things that they’re doing here, is repealing the Obamacare, charge on Obama, that’s going to affect millions of Americans who have been counting on Obamacare. They’re going to see their health insurance rates rise. If they’re going to pay for this thing without increasing the debt, they’re going to have to cut Medicare. There’s a talk about a $300 billion reduction in Medicare. So, this is going to really impact a lot of ordinary Americans.

The only ones who can really count on benefiting from the bill are the people who are supporting the K Street lobbyists. The Apples, the Googles, the Microsofts. The big, major multi-nationals who are going to get a one day tax cut on their offshore wealth that they’ve stashed and also many other multi-nationals, and Wall Street, which is, you’ve seen Wall Street stock rise just this week in response. Major banks here are going to have a tax holiday.

AARON MATÉ: James, it’s been amazing for me to watch just how Republicans aren’t making much of an effort to hide that fact. There’s that famous quote from Senator Lindsey Graham, the Republican, where he said that,”if we don’t pass this tax reform, the financial contributions will stop.”

JAMES HENRY: I mean, that’s pretty blatant. I think they’re worried about running out of time because they’re facing the November 2018 elections. They have a President who, to say the least as we saw in today’s news on Flynn, makes it clear is in trouble. And, they want to be able to say to their donors, “at least we did something during the last two years.”

So, this is a very unpopular bill. At least 62% of the American people are opposed to this tax plan, even before they know what’s in it. They know enough about it to know that it stinks and they’ve seen the process being worked behind closed doors, and there’s every indication that the people who are writing this bill do not have their interest at heart.

We’re in an economy where we already have pretty full employment. Most of the economists I talk to, don’t expect this to accelerate growth very much, if at all. In fact, the idea of paying for tax cuts for the rich with federal borrowing or deep spending cuts for the poor and the middle class is just the opposite of what you’d like to do if you want to stimulate the economy.

So, all things considered, this is a horrific bill that can only be explained by the fact that the people writing it are representing not us but their donors.

AARON MATÉ: James this is a tangent, but just briefly. When you say that economists, why they believe that we have full employment. The unemployment rate is pretty low but isn’t it also true that that figure does not account for all the people who just simply just stopped looking for work?

JAMES HENRY: It does, and there are efforts to take account of that. I think even when you make those adjustments and look at people who have dropped out of the labor force, for economic reasons those numbers are still quite low compared to where they were. It’s not satisfactory by any means but compared with where we were over the last decade or so, under the Obama administration I think it’s fair to say that the employment, job situation improved considerably. And it has continued to do so during this first year of the Trump administration.

So, I don’t think anyone denies that the economy’s operating at a pretty tight rate. We don’t see inflation rising yet but no one’s making the case we need tax cuts in order to stimulate economic growth except these Republican donors.

AARON MATÉ: Okay right, so then two questions then: the first is even assuming that this bill passes tonight, when do you think we’ll actually know the full extent of what’s in it? And also, if there have been economic gains in recent years, certainly we have rebounded from the worst of the financial crisis, although not totally obviously. Do you think that this tax bill is seismic enough to undo whatever benefits have happened in the past few years?

JAMES HENRY: Well, it’s going to hurt some very specific people very hard. I think the low income people who are counting on health insurance. Elderly people are going to see some tax rates increase for odd reasons. They are big users of the state and local deductions and many people who live in places like New York or relatively high tax states, that are high tax for good reason, we tend to take care of people better than states that don’t use taxes and progressive taxation.

But I think it’ll take some time to know exactly what’s in the bill because in the next stage they have to reconcile this Senate bill with whatever is in the House bill, and it’s not clear that they’re going to be any more open about that negotiation over the next few weeks than they have been up to now.

So, I think by the time we get to see what’s actually been done to us it’ll be some way down the road. But it’ll be plenty of time for us to do the detailed analysis that’s required. I’m a betting man, I believe that the odds are that when we do the numbers we’ll find out if anything, it’s even worse than we suspect right now. That’s in a way, good news for the progressives, in the November 2018 election, because I think what we can try to ensure, is that this is the last time the Republican Party is ever able to do this to the American people.

AARON MATÉ: James Henry, investigative economist and attorney, also senior policy advisor with The Tax Justice Network, thank you.

JAMES HENRY: Thanks very much.

AARON MATÉ: And thank you for joining us on The Real News.

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  1. The Rev Kev

    GOP Tax Bill is Even Worse Than We Think

    Oh, I don’t know about that. I have a pretty good imagination. Anyway, no real surprises here. I think that it has been established over the past year that inspite of having the Presidency, the Congress and the Senate, that the Republicans could not properly organize a p***-up in a brewery. Their legislative accomplishments have not been exactly stellar but when you think what they could have done, perhaps that is not such a bad thing. It has been one flame-out after another.
    I have noticed, however, that when their donors – and I am talking about the big boys here – want something done, then it gets done quickly. Want more money for defense? Boom! There is $80 billion without a debate or a fight. Tax cuts for the billionaires? Boom! The Republicans all line up to get it done no problem. I would imagine that there was the threat to the Republicans that if they did not pass what they wanted, then donations would flow through to America’s other Republican party.
    I am not an economic geek but I would imagine that over the next decade, this will have a crippling effect on the American economy and as far as confidence is concerned about the consumer economy, well, I just do not believe that there will be much loose cash to support any such thing but that is just me talking aloud. If I was an investor, I would go long in cans of baked beans and shotguns.

    1. rjs

      i watched a bit of bit of the amendment process that went late into the night (past 1:30) where each senator tried to add a pet project. the Cruz amendment passed 51-50, with Pence casting the tie-breaking vote..

      from Cruz’s webiste:
      Sen. Cruz filed an amendment to the bill that seeks to expand school choice by expanding popular 529 College Savings Plans to include K-12 elementary and secondary school tuition for public, private, and religious schools, and also to include K-12 educational expenses for homeschool students. Adding homeschoolers and expanding 529’s would help ensure that each child receives an education that meets their individual needs, instead of being forced into a one-size-fits-all approach to education. Currently, more than 75% of 529 savings plans are from families making $150,000 or less, and this expansion of the 529 program to help K-12 expenses will further help hardworking Americans and their families save and prepare for their children’s future educational expenses.

      expect to find a lot more of that crap in there…

      1. a different chris

        >Currently, more than 75% of 529 savings plans are from families making $150,000 or less, and this expansion of the 529 program to help K-12 expenses

        Let’s unpack that…. oh no, it just spilled all over the floor. Anyway, what’s the flip side to the first assertion. I bet you would find at least “more than 50% of 529 savings plans are from families making 100K or more. And I also bet that’s “plans”, not amounts. Like Charlie Chucklehead has $500 in his and Richie Rich has the max. But they both “have a plan”.

        And it’s not relevant to K-12 at all… again Charlie is going to put a significant amount of money in for his kids kindergarten? How much will a young couple be able to put away in 5 years?

        1. Matt

          My family will benefit from the Cruz amendment. We are a family that has household income of less than $150,000 per year that has a 529 account. My son is 4 years old with a significant speech delay and has experts leaning towards diagnosing him with Autism. Speech therapy covered by our medical insurance will only allow for two 30 minutes visits per week that he did not show improvement from. Our public school system does not have a good special education program for speech development and putting him in the public system would guarantee him being labeled a special education student.

          Instead what we are doing is paying $3,000 a month for him to go to one of the best private schools for speech therapy and we are cutting into our savings and practically bankrupting our family as a result. He has been showing great improvement since he started going to this school 3 months ago. It would be really nice if my family could use the funds from our 529 account to help out with the private schooling expenses that we are paying right now.

          My child does not fit well into the public school system, but yet I am still paying several thousand dollars in property taxes every year and vast majority of those taxes go towards funding public schools in my area. Public schools that do not benefit my family. It would be nice if I could get a portion of those taxes back to help my family pay for the school that my child is benefiting from, but I wont hold my breath.

          I thought the Democratic party was a pro choice party? Why would they not want us to be able to have more choices of schools for our children to go to?

          Cruz is a really creepy guy, but I am not going to automatically say something is bad that is being proposed by him just because I don’t like it.

          Same goes for Trump. He is a childish bully, but I was grateful when on his 3rd day in office he pulled us out of the TPP. I know Clinton would not have done that, and I have my doubts now that Bernie would have done it after donna brazile’s book came out. Bernie was told in advance the the DNC was going to steal the primary from him and give it to Hillary and he followed in line with what the establishment wanted and backed Hillary 100%. Did not complain one bit. Like he did not care about the cause he ran for at all.

          1. Jerry

            If every family that “does not fit well” in public schools could get a tax refund, pretty soon there would be no public schools. Would that be better?

            1. Joel

              I am very skeptical of the promises made by private and charter schools. At least in the blue states, if you can make the system work for you, which means being a squeaky wheel, there are many resources for students with disabilities and special needs in the public school system. However, none of those programs have marketing or public relations budgets the way private and even charter schools do so many parents are unaware of them.

          2. JTMcPhee

            For every anecdote like Matt’s there are likely dozens for whom the “Cruz amendment” are a clear negative. Before Matt claims his benefit, I hope he will wait to see what actual policy gets implemented. He might have a rude awakening. As with Obamacare, that helped a few and hamstrung many, setting the stage for more misery and bleeding at the hands of “insurance” looters.

            So generous to withhold judgment on Cruz pending hearing what he has to say. Almost all of which is, in my view, evil. That is one way decent people get snookered by the scammers: we reserve judgment, give second and third and fifteenth chances to devious people who yank the football away EVERY time.

            Wishing you all the best for you and your family. My stepson had challenges that were addressed pretty well without the “benefits” of a “Cruz amendment.” He is now a fully participating member of the credentialed precariat.

            And I very much disagree with your presentation of the history and boba fides of Sanders. Though of course we mopes will now never know what he would have been able to deliver.

            I’m curious: does the tax bill, as far as you know, benefit your home economy or hurt it? Short term, and long term? Can you live without Medicare and Social Security, where so many of us cannot?

          3. Anon

            I have no children, but have been paying property taxes (funding the schools) for some 50 years. I don’t complain about educating children ( I was there, once.) Maybe the local school board needs to find better funding for children like yours.

          4. Jeff

            I am a property owner who pays property taxes, doesn’t have children and doesn’t plan on having any. Do I directly benefit from those taxes that go towards public schools? Yes, I do. I might not have children but having a well funded public education system is crucial to the local economy, crime rates, birth rates and other factors. By your logic, I get no tangible benefit, which is not true. The benefit that I get isn’t quite as direct or immediately felt because I do not have children, but having at least a basically educated populace has many social benefits.

            About Bernie, what was he supposed to do after he lost the primary? Run as an independent? In a winner take all/FPTP voting system, voting third party is voting against your best interest due to the spoiler effect. The only logical option was to endorse Hillary in order to attempt to prevent the dumpster fire that is the Trump Administration from happening. The problems with first past the post voting explained.

    2. mtnwoman

      The crippling effect on the economy is coming a lot sooner than over the next decade.

      This coming year discretionary income for consumers is going to plummet when Jane Smith is paying 30% of income on health insurance.

  2. Dave

    I am almost at the point of not being able to read about the going ons of this country anymore. I try to find words to describe our current situation (disaster, embarrassment, disgusting, dystopian, corrupt, etc) but the words do not convey the magnitude of our current affairs AT ALL. I have emailed my horrible Senator Toomey, I have left voicemails on his DC line…….ugh

    1. hreik

      I am almost at the point of not being able to read about the going ons of this country anymore.

      Me 2

      1. Tvc15

        Yes, it’s never seems like good news. The only time I feel like we “win” something is when whatever egregious giveaway to the donor class is defeated, and that is normally only a temporary delay in the inevitable. Net neutrality looks like it may be the latest example.

    2. SpringTexan

      And I feel like the Democrats get so distracted. They have been talking about sexual harassment and stuff instead of the TAX BILL. It is so damn easy to get them to take their eyes off the ball! and get played again and again. . . and TRAGIC given the consequences . . .

      1. Big River Bandido

        It’s the perfect “distraction”. Allows them to engage in virtue-signaling and “fighting for average Americans”. It’s all phony, they always “lose” in the end…getting exactly what they wanted in the first place, while not actually having to cast a vote for it.

        Kabuki theater in every respect.

        1. jrs

          It’s all related, less safety net and more inequality means more desperation to take a job, *ANY* job, means more women putting up with sexual harassment (and workplace bullying and horrible and illegal workplace conditions etc.) as the price of a paycheck.

        2. dcrane

          Yeah, I would tend to guess that most of the professional-class DNC types will be doing pretty well under the GOP’s new tax code. Any reason to think otherwise?

          As long as they remain the only “serious” alternative to the GOP, it’s win-(mostly)win for them.

      2. PhilipSpencer

        This is such bull. How did the Dems get played? Last time I checked the Dems were given no input into the bill and they all voted against it. To suggest they are complicit in this travesty is ignoring reality.

        1. Big River Bandido

          The Democrats (specifically the “New Democrats”) have a 40-year record of collaborating with Republicans to enact regressive tax schemes, predatory market policies, and the destruction of the public commons for purely private gain. They managed to hang on politically for so long only because they could talk a decent game before the elections. But that hasn’t worked for them in a long time. Democrats lost the last of their power base in 2017 as a result of such clumsy duplicity. All this — the party’s catastrophic losses and its current impotence (or “lack of input”) — are a result of its own leaders’ failed long-term strategy.

          1. jsn

            Democratic leaders strategy hasn’t failed, they’re all just fine.

            Democratic constituents vision has failed in that they still can’t seem to see that Democratic leaders couldn’t give a rats ass about their constituents, there’s no money to be had there.

      3. JTFaraday

        How was the D-Party supposed to stop the tax bills? They didn’t even get to see them in advance, which is one of the biggest outrages here. Their only way forward in Congress is the next election. Granted, they might botch that even with the gifts the Repugnant Party is giving them. But I thought that they were at least awake enough to force the Repugs to vote down some good amendments that exposed their lies about their intents with the tax cuts. Like these:

        Not to mention the one that would have delayed the vote until everyone could actually read the 479 page bill. And there may have been others as I couldn’t pay too close attention.

        Doubtless, this was an exercise in gathering material for the next election, which could lead to the next betrayal of the public. The goal would seem to be to advance the proportion of actual progressive representation in Congress. Ride the “blue wave” and make nice with the women and black people in the D-Party instead of mansplaining everything to them like in the last election– which is as stupid as liberals accusing rural Pennsylvanians of racism in the press *every day* well in advance of the vote in 2008– and isn’t going to work.

        As they’ll tell you, this Bill passed because you didn’t vote for Hillary and otherwise support them and the D-Party. We have no good choices.

    3. nonclassical

      …the “burn it all down” trump voters (not insignificant) have arrived…the “poor” voters had nowhere to go, and still don’t, having already witnessed “swamp the drain” rather than “drain the swamp”…

      and for the poor, they need expect devolution of all health insurance outside workplace, dire affect upon workplace health insurance, and devolution of Medicaid, Medicare, Social Security, as the bill comes due for republican kickbacks to donors, lobbyists….and as primary republican action-goal, since FDR, leaving them no potential campaign promise not already broken….in other words, nothing but ability manipulate voting itself..

    4. Rosario

      Yeah, when I first read an article outlining the gains/losses for each tax bracket I thought for a moment that it had to be ripped from some Onion article on a theoretical Republican blood-sucking tax bill. Then I found out it was for real. I’m becoming far too cynical for a 31 year old, and I’m thinking it is starting to show.

      1. nonclassical


        If you don’t mind, allow me recommend 3 books – or youtube author sessions, as you can peruse;

        “The Devil’s Derivatives” (2007 Wall $treet fiasco, can kicked down road so none notices today-relevance) Nicholas Dunbar

        “The Devil’s Chessboard” (how Dulles CIA manipulated economics, banking, government, politics, foreign policy = U.S. imperialism) David Talbot

        “Crossing the Rubicon” (how 911 actually represented coup-questions gone unasked-therefore unanswered, + the answers) Michael Ruppert

    5. Allegorio

      Horrible Toomey’s re-election was a parallel to the Clinton/Trump fiasco. The Democrats put up a corporate shill, Katie McGinty that no-one trusted.

      “Former lobbyist Katie McGinty has spent three decades in politics getting rich off the companies she regulated and subsidized. Now this master of the revolving-door wants Pennsylvania voters to give her another perch in government: U.S. Senator.” Washington Examiner.

      She was a Clintonite through and through, that everyone, much like $Hillary, could see through.

    6. April Campbell

      Everyone should just not file come April. This is what you get when you behave like sheep–slaughter.

  3. Expat

    To paraphrase the Beatles, you say you want a revolution…but you don’t really mean it. You want more of the same because it makes you feel good to keep voting for your Senator or your Congressman. The others are corrupt and evil, but your guys are good. If only the others were like your guys. News flash: they are all your guys.

    America is doomed. And so much the better. Despite all America has done for the world, it has also been a brutal despot. America created consumerism, super-sizing and the Kardashians. These are all unforgivable sins. America is probably the most persistently violent country in the world both domestically and internationally. No other country has invaded or occupied so much of the world, unless you count the known world in which case Macedonia wins.

    This tax plan is what Americans want because they are pretty ignorant and stupid. They are incapable of understanding basic math so they can’t work out the details. They believe that any tax cut is inherently good and all government is bad so that is also all that matters. They honestly think they or their kids will one day be rich so they don’t want to hurt rich people. They also believe that millionaires got their money honestly and through hard work because that is what they learned from their parents.

    Just send a blank check to Goldman Sachs. Keep a bit to buy a gun which you can use to either shoot up a McDonalds or blow your own brains out.

    And some people still ask me why I left and don’t want to come back. LOL

    1. tony

      Macedonia of today is not the same are that conquered the world. They stole the name from Greeks.

      That being said, the US is ripe for a change. Every policy the current rulers enact seems to make things better. However, I suspect a revolution would kill majority of the population since it would disrupt the all important supply chains, so it does not seem viable.

      However, a military takeover could be viable. If they are willing to wipe out the most predatory portions of the ruling class, they could fix the healthcare system, install a high-employment policy and take out the banks and even the military contractors. Which could make them very popular.

      1. False Solace

        > a military takeover could be viable

        Yeah, right. Have you seen our generals? They’re just more of the same leeches we have everywhere else in the 0.01%. Have you seen any of the other military dictatorships around the world, like actually existing ones? They’re all brilliantly corrupt and total failures when it comes to running any sort of economy. Not to mention the total loss of civil rights. Americans have this idiotic love of their military thanks to decades of effective propaganda and think the rule of pampered generals would somehow be better than the right to vote. Bleh.

        1. Allegorio

          This is a military dictatorship. The fourth and sixth amendments have been de facto repealed. Trump cared about one thing and one thing only, namely to repeal the estate tax. He is the ultimate con man and this was his biggest con. It is truly amazing how he accomplished this. He has saved his family a billion $$$. He will now turn over governing to the generals and Goldman Sachs. He may even retire. Truly amazing. One has to admire the sheer perversity of it all. When will the American electorate get tired of being conned? The fact is they have nothing but admiration for Trump. We live in a criminal culture, winner take all. America loves its winners.

            1. Anon

              It certainly can, but not before trillion$ of potentially taxable corporate profits have been “money-laundered” and estates transferred tax-free into untouchable Trust Funds.

    2. John Wright

      There is an old 2003 David Brooks column in which he mentions that

      “The Democrats couldn’t even persuade people to oppose the repeal of the estate tax, which is explicitly for the mega-upper class. Al Gore, who ran a populist campaign, couldn’t even win the votes of white males who didn’t go to college, whose incomes have stagnated over the past decades and who were the explicit targets of his campaign. Why don’t more Americans want to distribute more wealth down to people like themselves?”

      Then Brooks goes on to explain

      “The most telling polling result from the 2000 election was from a Time magazine survey that asked people if they are in the top 1 percent of earners. Nineteen percent of Americans say they are in the richest 1 percent and a further 20 percent expect to be someday. So right away you have 39 percent of Americans who thought that when Mr. Gore savaged a plan that favored the top 1 percent, he was taking a direct shot at them.”

      The Republicans have conditioned people to believe government services (except for defense/military) are run poorly and need to be “run like a business” for a profit.

      The problem is that not all government services CAN be profitable (homeless care, mental health care for the poor, EPA enforcement, OSHA enforcement). And when attempts are made to privatize some government operations such as incarceration, the result is that the private company tries to maximize profits by pushing for laws to incarcerate ever more people.

      The history of the USA as viewed by outsiders, maybe 50 years hence, will be that of a resource consuming nation that spent a vast fortune on military hardware and military adventures when it had little to fear due to geography, a nation that touted an independent press that was anything but, a nation that created a large media/entertainment industry which helped to keep citizens in line, a nation that fostered an overly large (by 2 or 3 times per Paul Whooley) parasitical financial industry that did not perform its prime capital allocation task competently as it veered from bubble to bubble and a nation that managed to spend great sums on medical care without covering all citizens.

      But the USA does have a lot of guns and a lot of frustrated people.

      Maybe Kevlar vests will be the fashion of the future?

      1. Steve

        Thanks for the great link on how sadly uninformed average Americans are! I’ve been looking for it for a while and great comment!

      2. MyLessThanPrimeBeef

        The provision to do away with the estate tax, if not immediately, in the current versions (House and Senate) is great news for the 1%, and bad for the rest of us.

        And if more people are not against that (thanks for quoting the NYTImes article), it’s the failure of the rest of the media for not focusing more on it, but wasting time and energy on fashion, sports, entertainment, etc.

          1. Heraclitus

            The reality is that the very rich don’t pay estate tax. No Walton has ever paid a dime. The very rich have access to the attorneys who craft their business in such as way as to avoid it. It’s the middling rich–$5 million to $50 million, with private businesses or real estate–who pay it. Edward Altman of NYU did a study about thirty years ago that demonstrates this, though of course the numbers are different today.

            The estate tax is a red herring of the lefty media. The pass through entity change, however, is a huge grab by the 1%.

        1. saurabh

          This is a bad article. Yes, obviously, rural America doesn’t trust coastal elites and views them with hostility, rejects their narratives in favor of ones that they find comfortable, are intransigent and hostile to outsiders, etc. Why shouldn’t they be? Those outsiders have been making war on rural America for decades. What “coastal elites” need to do to change this is simple: stop being fucking elites. Make common cause with rural America and solve their problems. E.g., end joblessness, build infrastructure, etc.

          Instead, “coastal elites” want to “understand” rural America only to the extent that they can secure their votes and assent in their ongoing conquest of the world. News flash: if your project is continuing inequality, you’re not going to get those on the bottom (and rural America is very much on the bottom) to go along with it, no matter how cogent and rational you find your discourse to be.

          1. nonclassical


            We all need “follow the $$$$”; it wasn’t “coastal elites”, new tech, immigrants, unions, schools, teachers, higher Ed., “liberals”, government, social security, medicare, the “poor”, or any other of round robin scapegoats who destroyed, and is still destroying U.S. economics….it was Wall Street, 2007 “control accounting fraud” disaster. That the can has been kicked down the road does not lead to “conclusion” 2009 has been deigned “recovery” – does nothing to alleviate reality of where Wall Street derivatives now reside-under FDIC auspices, awaiting next bubble-burst and end of remaining FDR legislative achievements, quite the contrary trump-republican promises:


      3. JTMcPhee

        The military adventures were largely in support of what Smedley Butler so accurately called the Great “Racket” of Monroe Doctrine colonialism and rapacious extractive “capitalism” aka “looting.”

        For those who haven’t encountered Maj. Gen. Butler’s take on his 33 years of serving the Oligokleptocracy, here’s a link:

        A smart and honest fellow, who even declined as a “war hero” to serve as the oligarchs’ figurehead in an earlier and clumsier plot to get rid of the trappings and regulation of “democracy:” The Business Plot,

        It took longer and costed the rich a bit more to buy up all the bits of government, but the way they’ve done will likely be more compendious and lasting. Barring some “intervening event(s)”.

    3. Jonathan Holland Becnel


      Project Much?

      While Republicans show their true colors, im out there seeing a resurgence of civil society. And im starting to reach Hard core Tea Party types. Jobs, Manufacturing, Actual Policy.

      IOW The Revolution Is Nigh.

      2018 will be a Fn watershed.

      1. Livius Drusus

        I hope you are right but I am skeptical about any major changes happening soon and especially about the resurgence of civil society. Everything I read indicates that Americans are more alienated from each other than ever before. Social media is a poor substitute for the many civil institutions that used to exist in this country. Robert Putnam wrote about this in Bowling Alone and I think things have gotten even worse since that book was published in 2000.

      2. nonclassical

        …history defines, only “change” comes “murka”, when all lose all…all forced begin again…

    4. JEHR

      I once sent a cheque to Goldman Sachs with a note saying that judging by their behaviour they needed the money more than I. They sent it back.

    5. SpringTexan

      Wondering where you live if you don’t mind saying, Expat?. . . doubt I would leave but sometimes I do think about it, and I could if not too expensive once I retire . . . so would like to know. . . I might . . .

      1. Expat

        I get asked that all the time. France. I won’t defend France, by the way. But it’s painful to look at the US from the outside after living abroad for nearly thirty years. All the propaganda and lies I was taught at school from the trivial to the serious. Watching Bush, then Obama, then Trump made me ashamed to be American, not to mention scared of traveling with my US passport.

        Ah, the US passport. I never gave it up. Very hard to to and now it’s expensive. But I no longer earn so much money so financially there is no point. When my parents die, I will probably give it up.

          1. Alex V

            Neither is particularly difficult from a bureaucratic standpoint.

            For taxes, you fill out a 1040 just like everybody else, and report your bank accounts to OFAC and the IRS if you have enough financial assets. Unless you’re wealthy or have complex finances, the average person can do it themselves, paying only the tax on time due to horribly written forms and instructions.

            Giving up citizenship is basically being current on your taxes, filling out some forms and paying $2350 (that’s somewhat difficult, as it used to be free).

            The difficult part is being perceived as a criminal by that bureaucracy simply for living abroad and wanting to free yourself from the shackles of US hegemony. FATCA is the most egregious example of this, given its wildly disproportionate fines and penalties for even minor transgressions, and its bullying of other countries into giving up sovereignty over financial privacy. I understand the goal of the law, but it vastly overreaches in typical American disregard for diplomacy and cooperation. FATCA is so bad it makes me sympathetic to Trump as he’s called for its repeal. And I think he’s garbage on virtually everything else.

          2. Expat

            Giving it up costs $4500 or so, plus the effort of driving four hours to Marseille and then back. The process is easy. I have been away so long there are no ulterior motives like tax avoidance. I have not paid US taxes in eight years since I now fly under the limits. Compliance and filing are effectively insanely annoying.

            I have to report every single account I have whether or not the money in the account was declared or not. It is extremely hard for me to open bank accounts because of US blackmail of foreign banks. So, I have a string of accounts across the globe just in case. I file locally and I file US. Local is about 30 minutes. US is still hours and hours.

            It’s hard giving up your nationality. I am cynical but perhaps not hard-boiled. I was born abroad but raised in the US from the age of about 2 and stayed there until I was about 22. Suburban lifestyle. Manhattan living out of college. My son is American, though my wife and daughter are not. My siblings and parents are all alive and living in the States.

            When my father goes, I think the passport will go with him. Not that he is a patriot, but I am sure the US will give me a very hard time returning to visit if I renounce. I already get harrassed at the border simply for living abroad.

            1. Joel

              I thought that if you renounced citizenship, your tourist visas/visa waivers were limited to 30 days per year? That’s a big disincentive.

              Also, you have to keep filing tax statements for several years afterward.

              They try really, really hard to keep people from renouncing.

    6. Eclair

      Not liking where we are and pulling up stakes … whether from Ireland during the Hunger, or from the German states after the 1848 revolution, or from Sweden when ‘land reform’ left you with a sliver of land that wouldn’t support a family of squirrels, or from the violence and social chaos of southern Italy …. and leaving for a ‘better’ country, has gotten us to this point. We are, effectively, out of room on this Planet; there is no ‘new world,’ no ’empty’ continent. We have run and retreated, beaten down by kings, barons, petty aristocrats, mean landlords, occupying armies and, sometimes, simply lusting for a new landscape to scrape and burn. We have run and run, sometimes mounting a desultory rear guard action, but now, we have no option but to turn and fight. Well, we always have the option to surrender, be captured and interned in the death camps of austerity, shredded safety nets, crapified jobs and debt peonage. Our choice.

      1. Vatch

        Heart disease? Type II diabetes? Color cancer? (I assume you’re joking, but in case anyone took the question seriously, I thought I should answer.)

        1. ambrit

          I had to laugh! “Color cancer,” otherwise known as lead poisoning.
          One of the men I work with at The Chicken Palace got a driving ticket recently. When I asked him about it, he replied: “I would call it the ‘Driving While Black Ticket,’ but it was a black cop!”

  4. Jim Haygood

    Renegade (ex-?) Republican David Stockman NAILS IT TO THE WALL:

    To be sure, some element of political calculus always lies behind legislation. For instance, the Dems didn’t pass the Wagner Act in 1935, the Voting Rights Act of 1965 or the Affordable Care Act of 2010 as exercises in pure civic virtue — these measures targeted huge constituencies with tens of millions of votes at stake.

    Still, threadbare theories and untoward effects are just that; they can’t be redeemed by the risible claim that this legislative Rube Goldberg contraption being jammed through sight unseen (in ACA redux fashion) is for the benefit of the rank and file Republican voters, and most especially not for the dispossessed independents and Dems of Flyover America who voted for Trump out of protest against the failing status quo.

    To the contrary. The GOP tax bill is of the lobbies, by the PACs and for the money. Period.

    There is no higher purpose or even nugget of conservative economic principle to it. The battle cry of “pro-growth tax cuts” is just a warmed over 35-year-old mantra from the Reagan era that does not remotely reflect the actual content of the bill or disguise what it really is: namely, a cowardly infliction of more than $2 trillion of debt on future American taxpayers in order to fund tax relief today for the GOP’s K Street and Wall Street paymasters.

    On a net basis, in fact, fully 97% of the $1.412 trillion revenue loss in the Senate Committee bill over the next decade is attributable to the $1.369 trillion cost of cutting the corporate rate from 35% to 20% (and repeal of the related AMT). All the rest of the massive bill is just a monumental zero-sum pot stirring operation.

    Stockman, who knows federal budgeting better than most of us know the contents of our own homes, goes on to shred the tax bill item by item, leaving a smoking, scorched-earth moonscape in his deadly rhetorical wake. And he’s not done yet.

    But Lordy, how he scourges the last hurrah of the know-nothing R party, just before it gets pounded senseless at the polls next year. Bubble III is the last hope of the retrograde Republican Congressional rabble. But it’s a 50/50 proposition at best that our beloved bubble lasts through next November. :-(

    1. tegnost

      thanks Jim, yes, this looks like it will knock the legs out of the “main st” economy, but over at versailles on the potomac they’ll be listening to/playing the fiddle and watching the country burn while guzzling 300 dollar scotch and and admiring their campfire.

      1. ambrit

        Right next to “Versailles on the Potomac” is the site of the former Bonus Army camp, Anacostia Flats. The burning of the Bonus Army camp at Anacostia Flats could be seen, as a red glow, from the White House. Historians charitable to Herbert Hoover suggest that Gen. Douglass MacArthur ‘conned’ Hoover into letting the Army ‘disperse’ the Bonus Army. The resulting spectacle can be said to be one of the prime reasons why the American public rejected Hoover when he ran for re-election against Franklin Roosevelt.
        I don’t know if Hoover played the fiddle, but MacArthur was known to be able to play politicians like one.
        The lesson here, if there is one, is that the present occupant of the White House had better be very circumspect about taking advice from Generals.

        1. nonclassical

          …”anacostia flats”…bonus army raided by Wall Street General MacArthur…which is reason in previous iteration of Wall Street power grab by “American Liberty League”, (“The Plot To Seize the White House”-Jules Archer) Marine General Smedley Butler felt forced play whistle-blower, providing FDR leverage he needed to prosecute banksters….

    2. Diversion & Smoke screens

      The reasons why Democrats are busy gaslighting about Russia etc instead of doing somethimg with real policies is now very clear. They have the same type of donors as republicans and in order to cover up for the royal screw over US (and the world) will go through is so massive that would anybody pay attention to what is really happening who knows what comes out of the bag:
      – wealth transfer = donors to both sides profit. Clinton too. Her “resistance” show is only distraction
      – war mongering = donors to both sides profit. Who knows what will come out of the support to Saudis and Israel bombing Yemen etc. Nothing good that is for sure.
      – total privatization of education = donors to both sides profit.
      – destruction of net neutrality = donors to both sides profit + side effect of making real info spreading even harder, making a political alternative to raise more difficult
      – dismantling of environmental legislation = donors to both sides profit

      1. sharonsj

        I have seen nothing in the news about Israel bombing Yemen. The Brookings Institute says the 10 countries involved in the intervention in Yemen are: Saudi Arabia, Bahrain, Qatar, Kuwait, UAE, Egypt, Jordan, Morocco, Sudan, and Pakistan (and the U.S. of course). I did find a nutty claim that Israel nuked Yemen with a neutron bomb–a claim based on an explosive flash caught on some camera. And from Newsweek: “A spokesperson for Yemeni rebels warned Israel not to intervene in the country’s civil war, saying Israeli military bases in Africa are within range of their missiles.”

        The Democrats’ stance on charter schools is mixed, whereas the Republican Party has long supported charter schools. Rather then spend more time researching all your statements, I ask that you do your own research; you have a computer–use it.

        1. nonclassical

          …while there is much “false-equivalency”, obama – HC – DNC appear having justified record of “more of same”…

          we will all witness whether Liz Warren-Senator Sanders are given legitimate platform, 2020…with 2018 “win” implicit, DNC likely will see no peril…

          Meanwhile libertarians-republicans have ability dump (scapegoat) trump (and republican voters who were allowed legitimize his candidacy), and just as bush-cheney, put trump legislation-deeds behind them…

          1. Allegorio

            Donald Trump’s only motivation to become president was to repeal of the estate tax and save his family a billion $$$$. He has no morals, no program, no nothing. The generals are protecting his $$$, bottom line. Now that he has repealed the estate tax I would not be surprised if he resigns. Mission accomplished, Brownie. Say what you want about the bumbling billionaire, he got the job done, an incredible performance, although he did have a little help from his friends. CNN anyone?

        2. Big River Bandido

          The gist of the commenter’s statement was true — Democrats are totally complicit in the end result of Republican economic and foreign policy. Until now, Republicans could only deliver on their promises when Democrats helped them out. The Democrats’ enabling strategy eventually alienated their own core supporters. With this tax cut, the Republicans have shown, for the first time, the ability to enact and sign their own legislation.

          The Democrats basically accommodated the Republicans long enough to ensure their own irrelevance. They will not rise again until their “mixed stances” and those who encourage them are purged.

    3. readerOfTeaLeaves

      Wow, adding to my weekend reading list.

      Also, my hunch: Sen Grassley, Sen Hatch, and the other GOP past-their-pulldate contingent want one more Glory Hallelujah Tax Mania to remind them of their splendid younger days.

      IIRC, both voted on the early Reagan-era votes that created the inequality we’ve seen grow since the early 80s. They are now both octogenarians.

      Last week, Stephanie Ruhle (msnbc, former Wall Street) dropped the penny when she scoffed that both Mnuchin (b. 1962) and Cohn (b. 1960) are ‘traders’. They were just old enough to enter finance in it’s post-Reagan, early network-enabled opulence.

      The tax monstrosity reflects, and is a creature of, a peculiar kind of mind-blindness characteristic of people who have scammed profits without building the infrastructure of business. I’ve concluded these idiots are too ignorant to recognize that it’s never, ever smart to eat your own seed corn.

      1. L

        Also, my hunch: Sen Grassley, Sen Hatch, and the other GOP past-their-pulldate contingent want one more Glory Hallelujah Tax Mania to remind them of their splendid younger days.

        IIRC, both voted on the early Reagan-era votes that created the inequality we’ve seen grow since the early 80s. They are now both octogenarians.

        I think this played a bigger part than most people think. I watched this process from start to finish and was repeatedly gobsmacked not by the fact that they were trying this, but by the fact that people like Grassley and Hatch kept angrily pushing it with statements about their connection with the poor, about how these bills always pay for themselves, and about how America loved this.

        The statements were so odd, so out of touch, they were almost detatched from reality or, from another time. And they always used them as an excuse for not listening as if their knowledge of the past beats understanding the present. I almost hate to say it but they came off as angry old cranks being led along by younger lobbyists who had no scruples in using them. Much like other angry 80 year olds I have known.

        It is sad to think that any attempt to change their minds would have required bringing them up to speed on the present. Let alone explaining how things really work now.

    4. MyLessThanPrimeBeef

      On a net basis, in fact, fully 97% of the $1.412 trillion revenue loss in the Senate Committee bill over the next decade is attributable to the $1.369 trillion cost of cutting the corporate rate from 35% to 20% (and repeal of the related AMT). All the rest of the massive bill is just a monumental zero-sum pot stirring operation

      The zero-sum game details:

      1. eliminating state and local deductions
      2. higher personal deductions
      3. doubling child tax credit
      4. tax credit for private education
      5. new income brackets and rates

      And the huge 35%-to-20% (or whatever) corporate tax reduction.

      According to MMT, this perversion of that theory (and pervert MMT will always be practiced) should put money into the system.

      The ‘government can spend as much as it wants, deficits don’t matter,’ is 1) not sufficient to ensure a desirable outcome and 2) can be abused to lead to many undesirable results.

      As for the zero-sum game, it’s zero-sum, so some of us 99% will benefit and the rest will suffer.

      Some may enjoy higher personal deductions, child tax credit or a lower rate in a new tax bracket.

    5. Yves Smith Post author

      That is basically what I have said, but not as forcefully or with the #s. The action in the tax bill is the reduction of corporate rates. That’s why they have to kill so many deductions, to “pay” for it.

      1. Jim Haygood

        Whereas if the US spent the same 1 to 2 percent on defense (meaning its own territory) that normal countries do, individual tax cuts could be cut back to the Reagan-era maximum of 28 percent, permanently.

        Alternately, individual taxation could remain the same and everyone could have health care and maybe free college too.

        These choices are unavailable because the unauditable Defense Dept and spook agencies have made themselves politically untouchable. This is the real scandal of the tax bill.

        A Republican party unable to deliver individual tax cuts after harping relentlessly on the theme for a decade is revealed as a fraud, a laughingstock and a failure on its own terms.

        1. JTMcPhee

          And guess what? “They” don’t care! Because “they” know they own the board and there are no consequences to “them” for what “we” mopes think of as bad acts and outcomes. And enough of “us,” particularly at the upper bound, get to stay standing in place or even gain a little bit in the vain attempt to race up the down escalator… as long as “we” service “their” interests and preferences.

  5. Sluggeaux

    I blame the Clintonites for this. Nearly half of eligible voters didn’t cast ballots in the 2016 presidential election — mid-term turnouts are even lower. If you count ineligible people — recent immigrants, people convicted of felonies or whose voting rights are suspended, and children, the DNC Dems and the GOP have decided that they only need to appeal to fewer than 20 percent of the population to stay in office. They are HAPPY to screw the other 80 percent of the population.

    This my friends, is despotism masquerading as democracy.

    1. L

      I agree with you about blame for the Clintonites. They hollowed out any meaningful core of the Democratic party and went out of their way to out-plutocrat the plutocrats.

      I also blame Senate Dems. I notice that for all their bluster the Senate Dems did not actually leave the senate to criticize this. Only Sanders did.

      But I have to disagree with your last point. There was no masquerade. This was knifework in broad daylight. The Republicans were so desperate to get this over the line (and to quite literally pay themselves off) that they no longer care to pretend. But for people like McConnell and Ryan that does not matter. Their investors get paid.

    2. RWood

      This seems appropriate: ‘what’s passed is prolegomena of any future malevolence’

      If reconciled and signed by Trump, this legislation will leave tens of millions of people beaten, baffled and bereft. With this bill, they establish a permanent inheritor class whose wealth will be so vast and untouchable that they can buy every election — local, state and federal — from here on out. This is not simply a tax bill: It is the last stage of a corporate coup that has been slow-walking its intentions for decades.

      For generations?

      1. RWood

        Such a notion:

        Whether you trace a grand narrative change in that mass psyche back to the worldwide countercultural uprising of the `60s and `70s which as Derrida was to phrase it deconstructed a mythology of a grounding reason transparently expressed in language, or to a relentless undermining of governmental authority launched by Conservative think tanks, attitudes changed drastically.

      2. nonclassical

        …not “for decades”…”follow the $$$$” to Wall Street bank trillions allowed placed under FDIC, by totally disempowered government, following 2007 $600 trillion largest theft-crime in human history:

        “JPM is the world’s largest purveyor of derivatives. Its total contracts have a notional value of $72 trillion—and 99 percent of them are booked at its FDIC-insured bank. Citigroup has nearly all of its $53 trillion in derivatives in its FDIC-insured bank; Goldman Sachs has $44 trillion parked at an FDIC-backed institution. After Bank of America purchased Merrill Lynch, BofA began transferring the securities firm’s derivatives to the FDIC-insured bank, which now holds $47 trillion in contracts. When Senators Sherrod Brown and Carl Levin, among others, complained that regulators’ acquiescence in these transfers contradicted Congressional instructions in the 2010 Dodd-Frank reform law, the Federal Reserve, the FDIC and the Treasury Department’s Office of the Comptroller of the Currency refused to answer their objections. This matter involves “confidential supervisory” and “proprietary business information,” the three agencies responded in unison.”

        (Yves, others, having already shown how crime was perpetrated)

    3. Kokuanani

      In terms of “blaming the Clintonites,” it’s useful to look at the Senate seats that the Dems lost in 2016 because of the loser at the top of the ticket, the failure to campaign in places like Wisconsin, the failure to do voter registration & GOTV, and the failure to deal with voter “purges” and other suppression tactics.

      The very good Russ Feingold ran in Wisconsin again the dreadful Ron Johnson — and lost. There’s a vote the Dems could have used to fight this disaster.

      Go on back through the 2016 list and see how Clinton and her enablers did this to what used to be the Democratic party. I’m too depressed to do so right now.

      1. SpringTexan

        Yes. Especially yes on Feingold.

        I’m reading Brazile’s book. It’s humorous and interesting (much more interesting than I expected from the excerpt in politico), but reinforces your point for sure.

    4. Altandmain

      The GOP and the Democrats are playing bad cop-good cop. Both serve the rich. They’ve used culture war issues to split the nation, while the rich loot and pillage society.

      The GOP is horrible, but the Establishment Democrats enabled their policies. Bill Clinton did that to Reagan and Obama to Bush 2.

      It’s a disgrace. Both parties serve the same rich donors. It’s a party, and you are not invited. You will be forced to pay the bill though.

      1. Dirk77

        Yes. From the hand wringing in these comments and elsewhere I sense an interesting assumption underlying them. Namely that any law a Republican controlled D.C. passes is regarded as permanent yet any law a Democrat controlled DC passes is regarded as temporary. So in three years when the Democrats regain D.C. this law which could be easily repealed will not? This is consistent with how Obama etc operated in 2009. So we will indeed live in a plutocracy. If that is the case then I can see in five years even the dumbest American looking toward a tyrant to deal with the plutocrats. Which would make Aristotle correct.

      2. jeff

        North Korea seems to be distraction du jour for this election cycle – scare the ignorant masses with ominous threats from afar anytime they start sniffing too close to the actual legislation being passed.

  6. wendy davis

    as he isn’t on your ‘bloggers’ list, yves, you and your commentariat may or may not find jack rasmus credible. but he weighed in at length on the house version of the gang rape of the rabble classes on nov. 13. the senate seems to have mooted a few of the items, but what will come out of reconciliation will be a set-up for destroying what’s left of the social safety net. how many ill die, how many will bleed, go hungry, lose their houses, their minds…

    ‘The Trump-US House $4.6 TrillionTax Cut–Who Pays?’, by Jack Rasmus, Nov. 13

  7. lyman alpha blob

    That’s in a way, good news for the progressives, in the November 2018 election, because I think what we can try to ensure, is that this is the last time the Republican Party is ever able to do this to the American people.

    Really? And which “progressives” would those be? The ones who can’t seem to keep their John Thomases from jumping out of their knickers to say “Hello!” to every passing nubile young fleshpot? Does he mean the Democrat party which today largely consists of Republicans who can just mange not to drool on themselves while speaking? These are the people voters are going to flock to the polls to elect? Funny, I thought 2006, or maybe 2008 was the “last time” the Republican party would be able to do this to the American people.

    And when those “progressives” fail to deliver just like the last time they had the majority, we can start the whole charade all over again. Yippee.

    1. Kurtismayfield

      I am sure that the DNC is partying over this. They can run all their blue dogs in 2018, and when this all takes effect the people will vote for anyone with a D next to their name.

      1. jeff

        exactly, Biden will be carried through the street as if he was Jesus come 2020.

        if people are this scared and ignorant, perhaps we are just getting what we deserve. where are the pitchforks?

      2. Yves Smith Post author

        This is the second time you’ve misidentified what a “blue dog” is. We corrected you last time. This no longer looks like a mistake. It’s not on to spread disinformation.

        A “Blue Dog” is a deficit hawk, strongly pro corporate Democrat. They were pretty much all turfed out in the 2012 election. There is no good reason to think they are coming back.

  8. wendy davis

    this is from this a.m., although before the final vote: ‘The US Senate tax bill: The financial oligarchy on the rampage’. holy hell.

    ““For Senator Lisa Murkowski of Alaska, who voted against Obamacare repeal, the price of her vote was incorporating into the tax bill an unrelated provision opening the Alaska National Wildlife Refuge for oil and gas exploration. For Ron Johnson of Wisconsin and Steve Daines of Montana, the price was another $60 billion in tax breaks for “S-corporations,” the mid-sized, multi-million-dollar enterprises that were treated less advantageously in the original bill than giant corporations. (the ‘pass-throughs’) The families of both senators own such companies. Senator Susan Collins of Maine extracted a promise from Trump to support increased financial subsidies for big insurance companies participating in Obamacare.

    “The money-grabbing is so reckless that the tax bill does not provide even a fig leaf of “fairness.” In 2027, for example, according to figures provided by the Joint Committee on Taxation and the Congressional Budget Office (both Republican-controlled), the bill raises the taxes of people making $40,000 to $50,000 a year by $5.3 billion and cuts the taxes of those making $1 million a year or more by $5.8 billion.”

    “Senate Democratic Leader Charles Schumer was not in the group [15 or so Ds’ press conference], but he has repeatedly indicated his support for the main goals of the tax bill, which are to slash the corporate income tax rate, now 35 percent, and to allow giant companies holding trillions in cash overseas to “repatriate” the funds and pay only a nominal tax. He closed out the Senate debate with unctuous praise for Republicans, “many of whom I admire,” and an appeal for them to reconsider and reach a bipartisan deal with the Democrats.

  9. allan

    Retaining Corporate Alternative Minimum Tax Could Undercut Research, Housing Credits [WSJ]

    A late decision by Republicans could severely limit companies’ ability to use tax credits for research and low-income housing. …

    “For many companies, they will find that they will be unable to use the research credit because of that minimum tax constraint,” said Drew Lyon of PwC LLP.

    In the previous version of the Senate bill, repealing the corporate AMT reduced revenue by $40 billion over a decade. That suggests that retaining it would raise that much money. Mr. Lyon said he was surprised that the estimate was that low and that the change would affect many companies.

    Who needs research. That’s just fancy fake news for credentialed 20%ers.
    And who needs low income housing when incomes of real Americans will be soaring.

    Just as form follows function, policy follows process.
    Writing a multi-trillion dollar tax bill in real time has consequences.

  10. Matt

    Now that it’s passed, how long before Democrats and Republicans “come together in a spirit of bipartisanship” to make the “hard decisions” to privatize Social Security and Medicare in order to ensure “fiscal responsibility?”

    This country’s cruelty and hatred of poor people is shocking.

    1. m

      I wonder if more medicaid is used to house the elderly, than pay for health care for the poor. Most of these for profit long term care places will close. All the better, never put mom & dad there. Very costly with little care.

      1. ambrit

        It’s actually more of a sentence of quick death. We’ve seen it up close and personal. If nothing else turns one into a raving supporter of socialist/anarchist policies, that experience will.

      2. jrs

        it probably does go to long term care and people often have no choice, I mean can everyone quit their job to care full time for a family member with dementia?

  11. Jim Haygood

    Vignettes from a farce:

    You really don’t read this kind of legislation,” Sen. Ron Johnson, R-Wis., told home-state reporters, asked why the Senate was approving a bill some senators hadn’t read.

    Democrats took to the Senate floor and social media to mock one page that included changes scrawled in barely legible handwriting.,-GOP-near-big-legislative-win

    Nothing wrong with scribbling dramatic changes to the tax code on cocktail napkins, as ol’ Wilbur Mills (chair, Wayz ‘n Means) used to do when he was cruising the boîtes of Foggy Bottom with the Argentine Firecracker Fanne Fox.

    It’s considered poor form, though, if the lipstick smudges remain visible.

    1. ambrit

      It may be poor form, but I was under the impression that a contract signed in soy sauce using a swizzle stick still had the force of law behind it.
      The other big problem with this is that “what happens inside the Beltway” don’t stay inside the Beltway. That other casino resort, Las Vegas at least pays lip service to decorum.

    2. jeff

      hahah ah man I miss the comments section here at NC.. makes me feel a little less like an alien on earth

  12. James Cole

    Regarding the sequence in this interview where Maté briefly challenges Henry on “full employment” and then lets him dismiss it blithely and concludes “So, I don’t think anyone denies that the economy’s operating at a pretty tight rate. We don’t see inflation rising yet but no one’s making the case we need tax cuts in order to stimulate economic growth except these Republican donors.”

    This is exactly what is wrong with mainstream economics and Democratic Party rhetoric. While everyone knows tax cuts –especially these tax cuts–are a poor way to stimulate growth, both this very site and the more intellectually coherent parts of the populist alt-right are arguing quite the opposite: that we’re not “tight” and deindustrialization and US trade policy are to blame.

    Rhetoric like this is one reason for the white-hot fury in the Rustbelt that got us Trump and also why Sanders was far more appealing than Clinton to so many voters.

    1. m

      David Stockman is telling it like it is & that is why Fox/CNBC cut him off. Plain and straight any Fox viewer can understand, When I listen to C-span many immigrant callers (basing this on accents) they understand it is a scam. Greatest caller comment (sounded like midwest), ” this bill is like the story my grandpa told us about the cow & the sparrow, Feed the cows enough oats & it passes through the alimentary canal, then some gets sprayed out on the grass for the sparrows. They cut him off. HA!

  13. Chauncey Gardiner

    Peak Plutocracy as “K Street” lobbyists rewrite the tax code for the benefit of large corporations, Wall Street and a few wealthy families, and their legislators obfuscate the contents of the legislation and remain deaf to the desires of the majority of the American people. Seems to me there was a political event about 240 years ago against just this type of behavior.

      1. m

        K street has been writing our laws for some time, not sure why these people even need staff. We need to figure out a way to create a new economic system and not become a part of this, like the so called unbaked that these companies are chasing.

  14. JEHR

    It seems to me that this tax bill is just the kind of effort that millionaires and billionaires would want from themselves. They need never think of anyone else because they run the WHOLE show. No one should be surprised.

    1. allan

      The Dem messaging on this was terrible, whether due to incompetence or collusion.
      Two charts which should have been plastered over the airwaves and online
      are about two thirds of the way down this Vox article based on Tax Policy Center data,
      labeled “How much the Republican tax bill cuts taxes for Americans in each income group by 2019”
      and “… by 2025”.

      Better that the Dems had spent $30 million putting these charts in front of GOP constituents’ eyeballs,
      rather than flushing it down the drain in GA-06.

  15. Bobby Gladd

    A staple of legislation involves regulatory discretion accorded “the Secretary” of the lead department — in this case Treasury and Mnuchin. Phrases such as this appear 71 times in the pdf copy of the passed bill I just opened:

    “The Secretary shall issue regulations to carry out the purposes of this section…”
    “the Secretary may waive part or all of the tax imposed by subsection (a)…”

    This kind of language turned out to be an achilles heel in Obama’s ACA, once “the Secretary” became (the now-departed) Tom Price.

    As this GOP POS language is finalized, discretionary authorities granted “the Secretary” will be very important.

    Mnuchin. Isn’t that comforting?

  16. justsayknow

    Heard Chris Mathews say the dems did not really fight this because it is a win-win for them. Their donors receive huge sums in tax breaks to in turn funnel some crumbs back to the Democratic Party owners and of course they get to run against it in ‘18. WBF we be f….

    1. JTFaraday

      This is a gift to anyone who decides to use it. Progressives can also run against Dem incumbents. Here are 3 prospects right here:

      “The following Democrats voted against Sanders’ amendment to block cuts on Medicare, Medicaid, and Social Security: Sen. Tom Carper (DE), Sen. Dick Durbin (IL), Sen. Mark Warner (VA). Interestingly, Republican Sen. Susan Collins voted in support of Sanders’ amendment. It’s not known exactly why these Democrats voted against Sanders’ amendment. Two out of three have shared their reasoning so far, but voters are still confused. Durbin, for example, said his vote was because of “procedural reasons.””

      Yeah, that will go over big with the public.

  17. MichaelSF

    It would be interesting to know how the Pelosi and Blum/Feinstein fortunes will be affected by the tax bill.

  18. UserFriendly

    I read a book as a kid where all the adults died of some mysterious disease. I seriously hope someone is using CRISPR to make a virus that kills every single millionaire. I hope it is a miserable painful death too.

  19. allan

    Trump’s third fundraising event of the day, at 740 Park Avenue, was at the home of Steve Schwarzman.

    From yesterday:

    Blackstone, Carlyle, KKR, Apollo just got their own little loophole in the tax bill. Cornyn amendment 1715 (to be included in manager’s amendment). PTP [publicly traded partnership] income, but not other financial services income, gets 23% passthrough deduction.

    As Steve Schwartzman would say, it’s like when Hitler invaded Poland in 1939.

    And as SCOTUS would say, non quid pro quo, non problemo.

  20. TedHunter

    Oberving from abroad and therefor at a loss.

    Did this tax bill sink in with those Trump voters who supported him 12 months ago because of his anti-establishment rants? Or is the situation already past flipping the table?

    1. False Solace

      They’re thoroughly brainwashed by right wing media, and tend to be low information voters who rail against fake news. They want to “give Trump a chance”. They make decisions based on what they see in their personal lives. It will take them a couple years to notice things have gotten a lot worse, and by then who knows what they’ll blame (besides blacks and women and poor people of course, those are a given).

      1. ambrit

        Time for some pithy ‘left wing’ brainwashing. Oh, d–n! Super wealthy people transcend party affiliation. All that’s left is Gore Vidals’ “Property Party.” Er, maybe The Party of Mammon could be ‘turned’ a bit. Make the sacrifice of chattel property legal.

    2. jrs

      Why should it? Although a few may be independents, most of them are basically just standard Republicans and this is the type of things Republicans support.

  21. Chauncey Gardiner

    The Hill today reported that 6,000 lobbyists worked on this tax legislation. Funny, don’t recall voting for any of them. Also didn’t realize there were anywhere near that many in the Swamp. Wonder who even decides how to organize them on a project like this?


    So in summary, the GOP tax bill was written in secret by donors’ lobbyists, with last minute handwritten amendments and “pork” revisions in exchange for individual senators’ votes, then passed in the middle of the night without time for a full reading or analysis by senators.

    Begs the question: …”Taxation without representation”?

  22. Bobby Gladd

    BTW, my friends, on page 97 of the Senate bill is a provision enacting “Personhood at Conception,” according certain tax “designated beneficiary” rights to the “unborn.”

    I’m not making that up.

    1. ambrit

      You ain’t seen nothing yet. Just wait until sperm and eggs get to be protected as “Proto-Life Persons.” No more contraception, and back to ‘Barefoot and Pregnant’ for half the population. Who ever said that History only runs in one ‘direction?’

  23. Ep3

    Lol! Last time the republicans will ever do this to us! They blew up the World economy in 2008 and what did democrats do? They bowed down to whatever crybaby whims the republicans had. They didn’t make examples of them and their policies. So it’s safe to assume this is just the beginning.

  24. Adar

    I sense a disturbance in the force…. Seriously, I don’t think I’ve ever seen such a sense of despair and futility in the responses of long-time NC commenters. I’m becoming alarmed at this sense that it’s all going down the toilet. Is it true?

    1. FluffytheObeseCat

      “I’m becoming alarmed at this sense that it’s all going down the toilet.

      Well. It depends on what you are referring to by “all”. There is a fair likelihood that 8 years of Trump + a Republican Congress will damage the United States of America, and diminish the standard of living of most who dwell within its borders. For many of us here, who are in the U.S., are middle-aged or a bit older, and cannot easily pivot away from lives that have already been lived, this is a scary “all”. Most of the NC commentariat is acutely aware of how bad life became for older professional class citizens when the Soviet Union devolved into outright kleptocracy. The parallels are clear, however, most people in this world don’t need to worry about them, and worry is a waste of time even for those whose circumstances warrant it.

      This time around, the extreme right in the U.S. (commonly called ‘conservatives’, but this is a euphemism) may succeed in dismantling our social security system and public medical care programs. That will end if and when the voters stop them. It may take a few decades or a few years, or just months. It will be intriguing to watch, if nothing else. I fear for my bread……. but not my circuses.

  25. drumlin woodchuckles

    Does the Senate need to have some set minimum number or percentage of Senators present to make up a quorum? Below which number a bill passed by a less-than-quorum number of Senators is considered to be not passed at all?

    If the answer is no, then the Democratic Senators can only vote a symbolic “no” without preventing the bill from passing. If the answer is yes, then the further question is . . . what IS the number or percent of Senators who have to be present before a “quorum” is reached? That matters because if a “quorum” is necessary to pass a bill through the Senate, and if Democratic Senators against this bill can prevent the Senate from achieving the “quorum” threshhold by going into hiding and going dark; then that is how those Democratic Senators who wish to prevent this bill from being passed through the Senate can keep it from being passed through the Senate. By going into hiding and staying hidden in order to prevent the Senate from passing that ( or any other) bill as long as they stay hidden and unreachable.

    So . . . does anyone know if there has to be a quorum-load of Senators at the Senate-in-Session before the Senate can vote on bills? Or would having 51 Senators there be enough, and having the other 49 Senators hiding and out of reach not even matter anyway?

  26. vlade

    What I never ever understood is that in the US these tax bills are treated as once-approved, it’s forever (and has to expire if ever). Most of the countries in the world can (and do) change taxation on almost annual basis (mostly tweaks, arguably, but still), but in the US, it’s like tablets of stone.

    For us, non US readers, can someone explain why is it seems even the US unpopular legislation is rarely, if ever, overturned? (I understand that it’s hard with super-partisan Congress and presidential vetoes, but now and then you get all the stars aligned..)

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