By the time you read this, the Republicans' sweeping tax overhaul will almost certainly be the law. As of Friday, two key holdouts – Sen. Bob Corker of Tennessee and Sen. Marco Rubio of Florida – had announced their support, giving Republicans enough votes to pass the Senate even with the ill Sen. John McCain skipping town.
Corker, you might remember, voted against the tax bill on the first go-round, citing the $1.4 trillion in red ink it would spill. But the version of the bill unveiled Friday, drafted by the GOP conference committee, also blew a hole in the deficit. So what changed Corker's mind? As the intrepid investigative team at the International Business Times first reported Friday evening, the conference committee had added in an 11th-hour provision that potentially would benefit real-estate investors like Corker (and, for that matter, Donald Trump) to the tune of more than $1 million a year.
Corker told the IBT that he had no idea that little goodie was in the bill when he signaled his support for it, nor did he know who inserted it; in fact, he said, he hadn't read the thing. Color me dubious, but for the moment, let's give Corker the benefit of the doubt.
Rubio, meanwhile, was holding out for a more egalitarian nugget. (To back up: Nobody really expected Marco Rubio, who throughout his political career has demonstrated that he has the spine of a jellyfish, to vote against this thing. When the time came, he would fold like a cheap suit, and everyone knew it. But Republican leaders played along with his pretense.) Rubio, painting himself as a champion of the working class, threatened to withhold support unless the child tax care credit was expanded.
The conference committee acceded to his demands, making the tax credit fully refundable up to $1,400, up from $1,100 originally. This gets wonky, but it means that low-income workers who do not pay income taxes – but do pay payroll taxes – will be able to recoup up to $1,400 of the $2,000 credit. This amounts to $25 a month – woo-hoo? – and, to make the numbers work, Republicans lowered the eligibility age from 17 to 16, but this was good enough for Rubio, who garnered a wave of positive headlines (and sparked speculation that he is angling for a 2020 presidential bid).
Rubio's generous press coverage did reveal a fair amount of political skill: He managed to paint himself as a champion of the little guy while championing a piece of legislation that, once passed, will mark a massive transfer of wealth to the top 1 percent – or, more specifically, the top 0.1 percent. Populism this is not.
To understand why that's so, you have to understand how the bill works. First off, almost none of the things the Republican Party has told you about the bill are true. It does not simplify the tax code. It will not make Donald Trump and his ilk pay more. It will definitely not pay for itself. And it will not cause a tsunami of economic and job growth.
Instead, the bill is essentially a huge, permanent tax cut for corporations, with a smaller, temporary tax cut for individuals. The doubled standard deduction, for instance, as well as income tax cuts, will expire in 2025. By 2027, a New York Times analysis showed, the top 0.1 percent will see their after-tax incomes rise by 3 percent, while the bottom 50 percent of earners will see their incomes fall by 2 percent.
The individual tax cuts are front-loaded, meaning they start next year – a political move, considering it's an election year – but start to dwindle after that, eventually becoming tax increases for most of us. Because of Senate rules, Republicans had to do it this way to prevent the bill from being subject to a filibuster. Their theory is that a future Congress will vote to keep the individual tax cuts going, so no big deal. But that's only a theory – and you'll note that while the individual tax cuts expire, the corporate ones do not, which kind of gives away the game, doesn't it?
So in short, this is a tax cut for the wealthy and corporations financed by a future tax hike on the working and middle classes. Given that a defining issue of our time is the yawning gap between rich and poor – the top 1 percent controls nearly 40 percent (!) of the U.S.'s wealth, while the bottom 90 percent controls just 23 percent – this is an unconscionable policy, aimed squarely at satisfying the GOP's deep-pocketed funders while giving short shrift to the fundamental inequality that threatens our very economic system. Wealth, as the last three decades have dispositively taught us, does not trickle down. And if the working class doesn't have enough money to buy things, everyone suffers.
The rich are getting richer, and the poor are getting poorer, and this monstrosity of a tax bill is only going to exacerbate matters.
All of this is to say, if Marco Rubio actually gave a damn about the working poor, he would want his fingerprints nowhere near this trainwreck of a bill. But he doesn't give a damn, so he sold them out for $300 a year.