Politics of Poverty

3 reasons not to get on board with the new House tax bill

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A boat on the Se San River in Cambodia. (Photo: Patrick Brown/ Oxfam America)

The House’s latest legislation was doomed before it even hit the water.

In an interview last week, Rep. Paul Ryan (R-WI) compared tax reform to white water rafting,

“We’ve been going through Class 3 rapids, which is a pleasant ride. It’s nice. Everybody pretty much stays in the boat and it’s pretty good. But we’re about to go through Class 5 rapids, which is the biggest rapid you can go through…We’ve got to make sure that everybody stays in the boat and we get the boat down the river.”

He may be correct about the rough ride ahead, but a quick analysis of their new bill shows why getting on board the boat is a bad idea. Here are three reasons to avoid this hazardous trip:

The raft is already taking on water

Since the Republicans in Congress and the Trump Administration prioritized tax cuts for the rich, the tax debate has been tumultuous and rocky. Negotiations over essential provisions even pushed the much-hyped bill release back a day, revealing potential disagreements within the party. Republicans in the House have struggled to convince many of their colleagues from states like New York, New Jersey and California that the proposal’s plans to end the State and Local Tax Deduction won’t cost their constituents money. Many aren’t buying it.  Interest groups like the National Association of Home Builders have already announced their opposition to the bill, demolishing their previously publicized plans to support it. Most Democrats already strongly oppose the plan due to what Senator Ron Wyden (D-OR) calls its “…false promises to the middle class.”  Despite Republican assertions that the bill will benefit the middle class, it will actually be the opposite. It creates a sort of reverse Robin Hood effect by taking from the poor and middle class in order to give more tax cuts to the rich and big corporations. If the boat is taking on this much water before the tax bill is even released, it may lead to troubled seas ahead.

The world’s poorest were not invited on the trip

The House bill, written for and by America’s richest individuals, lobbyists, and most profitable companies, has never prioritized the rights of people in poverty. Today, we live in an era of extreme inequality where just 8 men have as much wealth as the poorest 3.5 billion people on the planet.  The legislation gives corporations and the rich a massive tax cut that is funded by budget cuts that not only harm the American middle class, but also take food, medicine, shelter, and clean water away from the poorest people in the world. This approach is ill advised. Since underprivileged individuals and communities were not invited to join the tax conversation at the start of the journey, the bill does not represent their interests.

The boat has new (loop)holes

The tax bill has proposed new loopholes for the rich and big corporations which will drown out all of the promises its authors made to deliver reform that helps the middle class. Today’s proposal eliminates taxes on offshore corporate profits and creates stronger incentives for companies to artificially push jobs offshore. As a result, more companies will shift their profits into international tax havens. Not only will the budget impacts of the bill drive pressure to slash the microscopic US foreign aid budget, the structural changes will make it harder for poor countries simply to collect the taxes already due to them. Soon enough, as a result of these tax dodges the world’s most vulnerable will likely be submerged in even more poverty and devastation.

From the perspective of those benefiting the most from the current global economy, this tax legislation is a prize winning boat. The rest of us will have to grab a lifejacket, because we will be forced to swim down the river on our own.

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