Rep. Bruce Poliquin had a big week. The representative for Maine’s 2nd District voted to bankrupt graduate students, add $1.7 trillion to the federal deficit and cut $25 billion out of next year’s Medicare budget.
And he did it all with a single push of a button.
All it took was his vote on the House Republicans’ Tax Cut and Jobs Act, an appealing-sounding 440-page rewrite of the tax code that was rushed from backroom negotiations to passage in the House chamber in less than two weeks – just a little more time than the House would usually take to recognize the University of Alabama’s award-winning marching band, or National Avocado Toast Day.
Poliquin said last week that he supported the bill because it would simplify the tax code, making it easier for middle-class Mainers to file their returns, but he was just being modest. This bill would do a lot more than that.
Poliquin voted to give away trillions of dollars to extremely wealthy individuals and corporations.
The cuts would be partially offset by the elimination of most tax deductions, and what that wouldn’t cover would be added to the deficit ($1.7 trillion), triggering cuts to the programs that Poliquin’s middle-class constituents rely on, including Medicare, Social Security and financial aid for students.
LIKE HEALTH CARE BILL
Like his vote last spring to upend the health care system – another bill that would have resulted in a massive windfall for the rich – this is a terrible piece of legislation, both for the country and for Maine. We hope we can again rely on the Senate, especially Republican Sen. Susan Collins, to prevent anything this reckless and destructive from ending up on the president’s desk. It’s small comfort to remember that the health care bill came within a single vote of passage in the Senate, and the tax bill is also expected to be close.
The linchpin of both the House tax bill and the version that’s moving through the Senate (which is, in some ways, even worse) is a reduction of the corporate tax rate, from 35 percent to 20 percent.
The argument usually made is that America’s high corporate rate drives investment overseas, where taxes are lower, sometimes zero percent. Lowering the U.S. rate, they argue, would encourage investment here, promoting economic growth, and benefit workers in the form of more jobs and higher wages. If that sounds familiar, it should. It was the same “trickle-down” argument made for lowering individual tax rates under President George W. Bush, and all that resulted was a massive increase in the national debt and the Great Recession.
But reducing corporate rates makes even less sense than those tax cuts, considering that the government had been running a surplus when Bush took office and we now have a $440 billion deficit.
PROFITS HIGH
What’s more, the profits made by U.S. corporations are at nearly all-time highs, so our current tax rates do not appear to be holding them back. When surveyed by Bank of America Merrill Lynch on what they would do with more cash, corporate CEOs said they would pay off debt and pass on dividends to stockholders, not hire more people or raise wages. According to an analysis by the Institute on Taxation and Economic Policy, foreign investors holding stock in American companies would get more benefit from this bill than the bottom 60 percent of American wage earners would.
The plan Poliquin supports includes other ways wealthy people can get wealthier. It would eliminate the inheritance tax, which is now applied to only the top 0.2 percent of families, ensuring dynastic succession for those currently on top of the heap. It lowers the tax rate for pass-through income, helping some small businesses, but also allowing rich people to call themselves businesses and shelter more money.
To pay for these and other handouts, the bill is full of horrifically unjust take-backs: A $250 tax credit for teachers who buy supplies for their students is eliminated. So is the exemption for people who have to pay more than 10 percent of their income in medical bills. And a graduate student on a scholarship who also gets a small stipend to teach or work in a lab would have to pay tax on the full amount of waived tuition as if it were income.
This isn’t tax reform – it’s a publicly funded reward for the handful of wealthy donors who have bankrolled the Republican takeover of Congress.
Still, 13 Republican House members had the guts to stand up for their constituents and vote against the bill last week. Maine’s Poliquin should have been one of them.
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