Tax legislation heightens inequality, limits state governments. No wonder Tom Cotton loves it. | Arkansas Blog

Thursday, November 30, 2017

Tax legislation heightens inequality, limits state governments. No wonder Tom Cotton loves it.

Posted By on Thu, Nov 30, 2017 at 7:52 AM

The New York Times' analysis of pending tax legislation should make you gasp.

It's a gift to the rich, larded with special interest junk. It will benefit the working poor and middle class only in the Never Never Land of Trickle Down.

The tax plan has been marketed by President Trump and Republican leaders as a straightforward if enormous rebate for the masses, a $1.5 trillion package of cuts to spur hiring and economic growth. But as the bill has been rushed through Congress with scant debate, its far broader ramifications have come into focus, revealing a catchall legislative creation that could reshape major areas of American life, from education to health care.

Some of this re-engineering is straight out of the traditional Republican playbook. Corporate taxes, along with those on wealthy Americans, would be slashed on the presumption that when people in penthouses get relief, the benefits flow down to basement tenements.

Some measures are barely connected to the realm of taxation, such as the lifting of a 1954 ban on political activism by churches and the conferring of a new legal right for fetuses in the House bill — both on the wish list of the evangelical right.

With a potentially far-reaching dimension, elements in both the House and Senate bills could constrain the ability of states and local governments to levy their own taxes, pressuring them to limit spending on health care, education, public transportation and social services. In their longstanding battle to shrink government, Republicans have found in the tax bill a vehicle to broaden the fight beyond Washington.

The result is a behemoth piece of legislation that could widen American economic inequality while diminishing the power of local communities to marshal relief for vulnerable people — especially in high-tax states like California and New York, which, not coincidentally, tend to vote Democratic.
Arkansas, incidentally, happens to be a state with a relatively high income tax. Those who itemize deductions in Arkansas will lose from elimination of that deduction.

Also note this head-slapping fact:

By 2027, people making $40,000 to $50,000 would pay a combined $5.3 billion more in taxes, while the group earning $1 million or more would get a $5.8 billion cut, according to the Joint Committee on Taxation and the Congressional Budget Office.

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