GOP plans to unveil deficit-exploding tax cuts for the rich 2 weeks after debt limit deadline
By: Jake Johnson, Common Dreams
S E E D E D C O N T E N T
With the U.S. careening toward a default crisis that they manufactured, House Republicans are reportedly crafting a major tax cut package that would overwhelmingly benefit the rich and corporations while blowing a multitrillion-dollar hole in the federal deficit.
The fresh push for tax cuts, according to Rep. Ilhan Omar (D-Minn.), further shows that "this hostage crisis has never been about deficits for the GOP."
"It has always been about wealth transfer—taking away food and healthcare from the poor and middle class to give away $3 trillion more in tax cuts to their rich friends," Omar, the deputy chair of the Congressional Progressive Caucus, tweeted Tuesday.
Politico reported earlier this week that Republicans on the House Ways and Means Committee hope to finish work on their emerging tax legislation by June 16, just over two weeks after the so-called "X-date"—the day on which the Treasury Department expects the federal government to run out of money to cover its obligations unless Congress raises the debt limit or President Joe Biden acts unilaterally.
"Key parts of the [tax cut] package... will likely include a full restoration of research and development deductions, full bonus depreciation, removing caps on business interest expensing, and a doubling of the $1.08 million limitation on the section 179 deduction (which, like bonus depreciation, allows a company to deduct an asset's cost up-front)," Politico noted.
The outlet added that Rep. Vern Buchanan's (R-Fla.) legislation aimed at making the 2017 Trump-GOP tax cuts for individuals and some businesses permanent "also has a strong likelihood of getting marked up in a broader package." The bill, known as the TCJA Permanency Act, currently has nearly 100 Republican co-sponsors in the House.
Buchanan, one of the wealthiest members of Congress, personally benefited from the 2017 tax law that he's working to extend.
"Republicans are holding our economy hostage because they want to cut programs for working families," Sen. Tina Smith (D-Minn.) said Tuesday. "Their next big move? Massive tax cuts for their rich corporate buddies. They may call it fiscal responsibility—I call it extortion."
The Congressional Budget Office (CBO) estimated last week that extending the individual provisions of the 2017 tax cuts—which are currently set to expire in 2025—would add $2.5 trillion to the deficit over the next decade. The original law made the cut to the corporate tax rate from 35% to 21% permanent.
"The hypocrisy of Republicans in Washington is truly breathtaking," Sen. Bernie Sanders (I-Vt.) wrote in a Fox News op-ed on Wednesday. "Over and over again, we hear from the Republican leadership about how deeply concerned they are about the large deficit and national debt that we have. Really?"
"If that's the case," Sanders asked, "why are they pushing for an extension of the Trump tax breaks that disproportionately benefit the wealthy and large corporations and would increase the federal deficit by $3.5 trillion?"
The Institute on Taxation and Economic Policy (ITEP) estimated earlier this month that just 1% of the benefits of the TCJA Permanency Act would go to the poorest fifth of Americans.
The richest fifth, by contrast, would receive nearly two-thirds of the tax benefits, ITEP found.
"The average tax cut for the richest 1%," the organization noted, "would be 25 times that of the middle 20% and more than 250 times that of the bottom 20% of Americans."
Republicans are preparing to launch their push for new tax cuts as they continue to hold the U.S. and global economies hostage in pursuit of steep federal spending reductions, all under the guise of lowering the deficit.
"We're not going to raise taxes," House Speaker Kevin McCarthy (R-Calif.) said earlier this week. "It's a spending problem."
But research published in March by the Center for American Progress (CAP) found that the GOP austerity crusade "does not address the true cause of rising debt"—tax cuts.
"Tax cuts initially enacted during Republican trifectas in the past 25 years slashed taxes disproportionately for the wealthy and profitable corporations, severely reducing federal revenues," noted Bobby Kogan, CAP's senior director of federal budget policy. "In fact, relative to earlier projections, spending is down, not up. But revenues are down significantly more."
"If not for the Bush tax cuts and their extensions—as well as the Trump tax cuts—revenues would be on track to keep pace with spending indefinitely, and the debt ratio (debt as a percentage of the economy) would be declining," Kogan observed. "Instead, these tax cuts have added $10 trillion to the debt since their enactment and are responsible for 57% of the increase in the debt ratio since 2001."
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So with all the yelling and screaming about debt this is the republican plan....
Anybody who quotes the little terrorist from Minnesota can be dismissed immediately.
And then this gem.
This is a lie, one thing she did fail to metion, the republicans passed a biill. it is the worthless piece of shit democrats who are holding the country hostage. McCarthy did his job, Where is the incompetent leader of the Senate? where is your bill chucky you piece of crap?
Don't tell me democrats control 2 thirds and still can't govern? please tell me democrats don't suck that much.
Can you read? It was in an article published by ProPublica and several other people said they have this in the works.
And your response is to attack the other side.
Denial once again.
I would like to see if this is actually truly in the works, or just another made up leftist lie.
Why would they lie about that?
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Where have you been?
Politicians will lie about anything and everything if they think it will give them an advantage.
You don't think Democrats wouldn't hesitate to lie about what is in a bill that hasn't even been written yet? Especially when they are taking it on the chin over the debt ceiling increase?
Do I think the GOP wants to cut taxes- definitely; just like Democrats always want to raise them as part of getting the debt ceiling increased. Brandon even stated as much. Where is the outrage over that? Economy teetering on the edge of recession- and Brandon and Democrats think now is the time to raise taxes.
Democrats have a losing hand; and are lashing out.
Funny as I don't see it as Biden sweating.
You can blame one side of the isle all you want, it would still be wrong.
Gawd, not more of the gop's Voodoo Economics!
We have a problem, we have a problem. Lets cut taxes....
We have a problem, let's raise taxes on the rich and corporations.
Good idea. Get them back to where they were pre trump tax giveaway.
Great idea. The recession awaits. Courtesy of Democrat repeated stupidity.
Bring it on.
Make it easier for the Republicans to retake the White House; and end the Brandon shit show.
Talk about taxes or be gone.
They are the very definition of a one trick pony.
Did you like the two Obama tax cuts? When will the Dems introduce the Fair Tax Share legislation?
The gop's long term wet dream is to starve our government of income to the point they can cut the shit out of Medicare and Social Security and Aid To Dependent Children, Food Assistance, Medicaid and Foreign Aid, Elder Care and every other program for the poor...
Everything but cutting their military budget.
What numbers are you seeing?
Tax cuts I have no issue with. Republican tax cuts that are blatantly directed at the top 5% I do. I got shit from Trump's "middle class" tax cuts, while the wealthiest people and corporations are still making billions off them.
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Soi you felt that the Obama extension on the Bush II tax cuts and his own 2013 cut were appropriate regardless of the impact on federal revenue?
History is not your forte is it?
Barack Obama gives way to Republicans over Bush tax cuts
Allies say president 'blackmailed' into extending tax cut for wealthier Americans which may cost $4tn in lost revenue
So Obama lacked the stones to stand for his principles? And that is somehow better?
So according to your article Pelosi was Speaker at the time, and Harry Reid was the Senate Majority leader, Obama was President and it is still the republicans fault.
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Why do you think that?.
Obama agreed at the end of 2010 to extend the Bush tax cuts for two years, 2011 and 2012. Then replaced the Making Work Pay Credit with a payroll tax “holiday,” which reduced Social Security payroll taxes paid in 2011, this was then extended through 2012 along with expansions in the EITC and Child Tax Credit for two years.
Obama agreed in 2013 to make most of the Bush tax cuts permanent and extended the expansions of the EITC and Child Tax Credit for five years. In 2015, he made the expansions of the EITC and Child Tax Credit permanent.
Obama put the good of the country over his personal feelings. Something the republicans could learn from.
Let me explain an expression to you:
Filibuster
A filibuster is a political procedure in which one or more members of a legislative body prolong debate on proposed legislation so as to delay or entirely prevent decision. It is sometimes referred to as "talking a bill to death" or "talking out a bill",[1] and is characterized as a form of obstruction in a legislature or other decision-making body.
Oh Right. The thing Obama was the first and only President in generations not to have to worry about.
Obama could have repealed the Bush tax cuts and reset the tax system anyway the Democrats chose without a single Republican vote but did nothing.
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The implication there being that the poor are somehow permanently entitled to other people's money.
It's like saying "my Dad refusing to keep paying my rent beyond my 30th birthday is responsible for 57% of my credit card debt".
Yep, just like that...s/
You are missing the point. Given the segment of the tax code you have chosen, I suppose that's to be expected.
Allowing businesses to deduct something all at once instead of deducting it over a decade is not the problem.
Allowing businesses to deduct the cost of inventing stuff is not the problem.
Allowing people to keep their own money is also not the problem.
The problem is spending. The 2023 budget spends over $17,000 per every American. That's men, women, and children regardless of age or income.
Let's be very clear here.... money you fail to seize does not count as "spending".
So your "fair share" of taxes is $17k. If you're married with 2 kids, it's $68k.
There is no level of taxation that produces that amount of revenue.
Funny it is only a spending problem now and wasn't a couple of years ago.
Tax cuts definitely lowered revenue, even the CBO states as such.
As far as spending, it seems the national debt exploded under Reagan...
And what did Reagan do? Oh yeah, lowered taxes....
No, it's been a spending problem for decades.
That is the point of them. They leave more money in the hands of the people who earned it.
They still don't count as "spending".
I realize that's the story Democrats tell. But their math is problematic, as usual.
Reagan raised taxes 3 times as President. BTW, that's more than Obama.
Tax receipts in Carter's last year were $600 billion. In Reagan's last year they were $991 billion. That's a 65% increase.
Spending during that time went from $678 billion to $1.15 trillion.
So even back then, it was a spending problem.
I have yet to see where trickle down has ever worked.
The top tax rate Reagan dropped from 70% to 50%.
The 'effective' tax rate was never 70%.
Obama made it work to some degree.
And yet total taxes went through the roof.
Reagan was a classic Keynesian. He spent heavily in times of recession and then attempted to recoup that as the economy got going.
The major problem with assigning success or failure to a single president is that any of these economic theories take longer than 8 years of a presidential term to actually work. So Clinton enjoyed a lot of the benefits of Reagan's actions, the same way Trump and Biden enjoyed a lot of the benefits of Obama's.
The problem we have now is that we're overspending when we should be cutting spending.
My point kinda was the spending problem is nothing new, even though some people try to act like it is or that it is specific to Biden or Obama or trump, Bush.
They all did it.
Problem being that I see, no one will ever agree on where or what to cut. Imo social services, especially medical related and VA services should never be touched. Some people say the forces should never be cut. Some say foreign spending should be cut yet even with that there are consequences. If we cut off aid to a country someone like China just fills the void.
Cutting innovation is almost like stopping innovation etc.
I have thought at one time if we could see what money is spent on, line for line, it would be a lot easier to cut what looks wasteful. Then I thought, some can look innocuous yet be somehow inter related to something else.
The amounts they deal with is something else. Beyond my paygrade. Haha
Yes, the only thing new is the size of the debt relative to GDP.
Imo the government can be a source, a natural resource. I will agree with Jack that it also should know when to back off.
Isn't that what Obama was doing...
First - that doesn't mean it shouldn't be addressed.
Second - it's especially bad right now and needs to be curtailed before we have another situation like 1979.
There always has been and always will be disagreement on where govt money should be spent. If the system is working properly, nobody gets everything they want.
So the tax deduction for innovation may not be such a bad thing after all. As you say, the intertwining of these things is more complicated than it seems at first glance.
It's a matter of where the money goes. The two most notable accomplishments of his presidency were the bank bailouts and the Affordable Care Act, putting massive amounts of government money directly in the hands of banks, insurers and big pharma.
Reagan's was a little different, in that he spent large amounts on defense, which generated jobs directly. Biden has done a similar thing with the infrastructure bill. The problem is that we don't need more job creation. We don't have enough people to do the jobs we already have open. So every new job just adds to inflationary pressures, resulting in higher interest rates, increased costs and increased inequality.
So Democrats want to raise taxes on the poor and middle class.
So republicans want to constantly lower taxes while complaining about budget.
They want to slow down the rate of spending growth (not even cut spending) and not increase taxes on the poor and middle class. The Trump tax cuts made the tax code more progressive. Shame Democrats want to punish those groups and make the code more regressive.
Uh huh. Funny they ever want to cut or stop or complain about spending when they are not in charge.
From what the article is saying it will basically be two tax bills.
They always complain about spending,
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An illustration of how gullible the left is.
We can’t solve crime or homelessness, but let us tax you more and we will solve global warming. Amazing how gullible some people are.
[✘]
Extending Trump Tax Cuts Would Add $3.5 Trillion to the Deficit, According to CBO
New report finds Republicans’ giveaways to the wealthy and large corporations are significantly more costly than previously estimated
fascists want to eliminate the estate tax also, another loss of $1.9 trillion dollars.
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enough meta. only warning.
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Blowing smoke about taxes doesn't change the fact that Federal spending is now 24 pct of GDP. And that doesn't include an additional $4 trillion spent by state and local governments.
Government at all levels are projected to spend $9.5 trillion this fiscal year. That means government represents 30 pct of the GDP. A third of the US economy has been devoted to running government. Raising or lowering taxes won't fix the economy's dependence upon government.
Republicans have, indeed, attempted to cut taxes as a way of forcing spending restraints onto the Federal government. Democrats just ignore the lack of revenue and spend more money anyway by using the debt limit as new revenue. Democrats want the economy of the United States to become more devoted to operating government. That's a spending problem. And Democrats have taken taxes out of the equation by simply raising the debt limit.
So you think spending only occurs when there is a Dem in the WH?
Federal spending (as % of GDP) is still well above pre-pandemic levels. And a Dem in the WH said he could be a better manager of the pandemic and its economic impact. Apparently that promise required making the economy more dependent upon government and making the government more dependent upon deficit spending to the debt limit.
The only reason the debt limit is a crisis is because government has been using debt as new revenue. There isn't any requirement for government to spend to the debt limit. Congress (controlled by any party) really can manage spending by spending less. Taxes aren't the only way to be fiscally responsible. If fact, increasing spending now on the promise of raising taxes in the future is very fiscally irresponsible.
If Democrats want to raise taxes then do so. But don't spend the money before the taxes are raised. Even that doesn't address the growing dependence of the overall economy on government that is being caused by excessive government spending.
On the same token, keeping the same spending levels while at the same time lowering taxes is a recipe for disaster.
The gop plan to starve the beast has proven that domestic spending is what will suffer first.
Republicans have put spending cuts on the table now. There aren't any tax cuts on the table now. In case you haven't noticed, Biden has been pissing down his leg because Republicans are demanding spending cuts in exchange for raising the debt limit. Republicans are not trying to cut taxes and keep spending levels, as you allege. Your allegation is flat wrong.
Democrats are claiming Republicans are holding the economy hostage because Republicans are demanding spending cuts. Democrats are claiming that cutting government spending will harm the economy. The Democrats own political rhetoric shows how dependent the economy has become on government spending. That dependence upon government spending is a spending problem and not a tax problem.
Wrong? Was the plan not to keep spending at a certain years level? That would mean keeping spending the same...
The article is about what republicans have in the pipeline.
The idea that Democrats are all at fault just because they wouldn't pass whatever the reps put in from of them is absurd.