Rep. Paul Ryan (R-Wis.), the new chairman of the Ways and Means Committee (which writes tax legislation), wants to make some previous tax breaks permanent — arguing that Congress has previously extended certain tax breaks before. But Congress had also done other things previously (that the GOP doesn't want to do now), such as transfer funds from the Social Security retirement fund to shore up the disability fund.
It didn't take long before the new GOP House began passing a series of deficit-hiking tax cuts that will primarily help the rich at the expense of everybody else. The GOP's most recent tax bill was the second tax cut passed by the House this week, after last Thursday's passage of a tax break aimed at encouraging charitable giving. Ryan's committee has also started to move other cuts that would add another $300 billion to the deficit, and which are likely to reach the House floor later this month or next. Paul Ryan sees an end-of-summer deadline for making strides on tax reform — but by now, most of us already know what the Paul Ryan's idea of "tax reform" is really all about: feed the rich and starve the poor.
Paul Ryan: "What we are simply trying to do here is produce certainty. We need to give businesses certainty. We need to help them plan for the future. We need to stop this crazy game of extending a tax benefit that has been on the books for quite some time, one year at a time, or retroactive one year at a time, and give businesses certainty."
Didn't it ever occur to the Republicans that regular working-class Americans, the poor and the disenfranchised might also want a little "certainty" in their lives as well? Would it be too much to ask that they had "certainty" that their jobs wouldn't be outsourced to foreign countries, and when they are, have "certainty" that their unemployment benefits won't be reduced? Or when they become disabled or old (and can no longer work), that they can count on Social Security? Or if they can only find part-time work that pays minimum wage, they can have "certainty" that they can still feed themselves and/or their children with the food stamp program? Why does the GOP feel that only the very rich (and large corporations) need any certainty at all? After all, they claim that it's they who take all the risks.
Rep. Sander Levin (Mich.) remarks on Paul Ryan's latest tax plan: "The gist of that ploy take a number of provisions separately, make them permanent, separately make them permanent, and don't pay a dime for them, not a dime. Not having to pay for $800 billion worth of tax cuts made permanent would make it easier for Republicans to lower taxes, especially on higher-income taxpayers, carrying out further their trickle-down tax policies."
With permanently reduced revenues, Democrats fear that it'll be that much harder to preserve middle-class tax breaks — and Congress would be forced to consider even deeper cuts to discretionary domestic programs (aka starve the beast). To boot, Republicans and Democrats have already identified other areas of possible agreement in rewriting the tax code — including lowering the top rates for large corporations — further starving the government of revenues.
From an article at the New York Times: "Reformers Try to Tackle the Tax Machine":
A study by the Government Accountability Office of profitable United States corporations with at least $10 million in assets put their tax rate at 12.6 percent in 2010. Many companies pay zero or close to it ... As corporations become more adept at shrinking their tax bills, the burden shifts to ordinary people. The Congressional Budget Office projected in January that corporate tax receipts would shrink to 1.8 percent of the economy in 2025 from 2.3 percent in 2016 ... The Treasury Department has been focused of late on stopping American companies from buying smaller foreign companies, then proclaiming their headquarters to be in a country with lower taxes. Treasury officials are now going after a longstanding escape hatch that has permitted hedge funds to transfer taxable assets to the Bahamas, in a game of loophole whack-a-mole ... Senator Ron Wyden (D-Oregon) speaks of the hardware store test: "If a politician cannot walk into a locally run store and say that the tax legislation will help shoppers as well as those running the business, he is not going to push for it." ... Paul Ryan hinted that he would be satisfied if so-called pass-through entities that pay taxes through the individual code — small businesses, partnerships and limited liability companies — received assistance, in the form of simpler and lower taxes.
The GOP's lame argument about "double taxation" on "pass-through income" can also be made for a typical worker's paycheck. If a corporation doesn't want to pay corporate taxes (and reap all the benefits a corporation offers), a business can always "un-incorporate". And Paul Ryan and the GOP also claim they want tax reform to help small businesses too, but the Republicans also define billion-dollar hedge-funds as "small businesses" (and not just the local mom-and-pop video store). The GOP is persistently relentless when it comes to taxing the very rich much less, while starving the very poor much more. It is the Republican party's major and overwhelming driving force — one they advocate above all other and any other policy issue.
Paul Ryan: "Here's the problem. What we're trying to do here, we're trying to grow the economy. We're trying to get people back to work." But so far, the Republican's ONLY idea for creating jobs is building an oil pipeline from Canada to the Gulf Coast so that the Koch brothers could make billions in profits — which TransCanada (the company who would build the pipeline) already said will only create 20,000 temporary jobs during its construction. While although, even ONE job created is good, the GOP's job plan will do little good for millions of other Americans who remain unemployed.
Just since the end of the recession in June 2009, almost 11 million Americans left the work force — and most were not the disabled, retirees or college students — most were prime-age Americans who may have already graduated from college and couldn't find work. Mark Thoma at CBS News writes:
The number of young Americans living with their parents has grown over the last 15 years. Some have returned home after striking out on their own (earning the nickname "the boomerang generation"), while others never left at all ... A new Federal Reserve Bank of New York staff report suggests the most important factor is the rising student debt of college graduates, which appears to be driving young people home and keeping them there. In 1999, approximately 30 percent of 25-year-olds lived with their parents — but by 2013 the percentage had risen to nearly 50 percent. In addition, home ownership for 25-year-olds has fallen from approximately 23 percent in 2003 to just over 10 percent in 2013. It has become more difficult for the young to get an education, strike out on their own, and not have to rely on their parents for support. And there's little reason to suspect this trend will end any time soon. 65 percent of college graduates are showing up on their parents' doorsteps looking for free room and board while they're looking for work.
But rather than focusing on creating jobs, the GOP seems more content with just tax cuts, and usually ones that better benefit the most wealthy. Although Republicans generally require new expenses to be paid for by cuts elsewhere in the budget (PAYGO), they don't when it comes to tax cuts. As a result, none of the proposed measures came along with savings from any another portion of the budget (such as defense). And if any were ever offered, if would most likely come at the expense of Social Security (one of the GOP's and Wall Street's favor targets).
Under Ryan's latest tax proposal, Democrats noted that while helping charities and small businesses is popular, the tax cuts under consideration tend to help the better-off, such as companies that have expired but edible food they can't sell — or people with huge retirement incomes. And that could come at the expense of other tax breaks that help the middle-class and poor. Paul Ryan says it's better for [very wealthy] individuals to decide how to spend their own money, not the government [for the benefit of 99%] — meaning, programs that would primarily benefit the poor and the lower-middle-class and what's left of the middle-class.
Rep. Lloyd Doggett (D-Texas) remarked: "Their [tax] package eliminates enough revenue to fund life-saving medical research through the National Institutes for Health for more than two years. Instead of a bipartisan commitment to comprehensive tax reform, they continue on a partisan path to promote the privileged.”
This is always the typical GOP way governing: feed the rich and starve the poor.
GOP Tax Policies on the State Level
Last year a very wealthy self-described "venture capitalist" named Mister Hanauer wrote a widely circulated article for Politico: The Pitchforks Are Coming … For Us Plutocrats — and he is credited as a key force behind Seattle’s recent decision to adopt a $15 minimum wage (the highest in the nation.) He once said: "Somebody like me makes hundreds or thousands as times much as the median American, but I don't buy hundreds or thousands of times as much stuff."
But the Republicans (who usually listen to billionaires) were never listening to Mister Hanauer. A number of Republican-led states are now considering tax changes that would (in many cases) have the effect of cutting taxes on the rich and raising them on the poor. Republican governors now hold office in 31 states — and of the Republican governors who have proposed tax increases, virtually all have called for increases in consumption taxes, which hit the poor and middle class much harder than the rich. Much harder than for billionaires such as Mister Hanauer, who says: "My family owns three cars, not 3,000. I buy a few pairs of pants and shirts a year like most American men. Occasionally we go out to eat with friends."
Governor Rick Snyder of Michigan urged voters to support a ballot measure that would raise $1.9 billion by increasing the sales tax and gas tax. Governor Sam Brownback of Kansas called for raising cigarette and liquor taxes. Governor Dennis Daugaard of South Dakota proposed an increase to the gas tax and several taxes and fees related to motor vehicles. Governor Gary R. Herbert of Utah has increased the tobacco tax and proposed extending it to e-cigarettes, while also saying he was open to an increase in the gasoline tax. Governor Nikki R. Haley of South Carolina said she would allow the state to raise its gas tax. Governor Paul R. LePage of Maine called for increasing the sales tax and subjecting more goods and services to taxation (such as movie tickets and haircuts) to offset the cost of eliminating the estate tax.
A new report by Keystone Research Center suggests that these states could be creating financial problems down the road. The strategy of shifting from income taxes to consumption taxes has caused huge budget shortfalls in Kansas — and more recently, North Carolina, which announced a budget shortfall of nearly half a billion dollars. One reason, according to the report, is that just as the tax burden has shifted away from the wealthy, the wealthy have received the lion's share of income growth in recent years. The Keystone report’s authors argue that a less regressive tax structure is the answer to state budget woes.
As it is now, the poor already pay more than the rich in taxes — that's to say, as a percentage of their income. According to another recent report from the Institute on Taxation and Economic Policy, in nearly every state, low- and middle-income families pay a bigger share of their income in state and local taxes than wealthy families. According to that report, in 2015 the poorest fifth of Americans will pay on average 10.9 percent of their income in state and local taxes, the middle fifth will pay 9.4 percent and the top 1 percent will average 5.4 percent. (And that doesn't even account for the huge tax advantage that the wealthy have with federal taxes if their only income is derived from capital gains).
Feed the Rich — and Literally Starve the Poor
The Chairman of the House Agriculture Committee, Rep. Mike Conaway (R-Texas), is leading the charge for "reform" in the food stamp program: “A family that depends on their own work is more secure. There’s a dignity in taking care of yourself.”
More than 20 states are preparing to reinstate time limits on SNAP benefits that most states had waived during the Great Recession (although, judging by their circumstances, millions wonder if the recession has ever ended). Food stamp "reform" will mean that healthy adults without children will be limited to three months of benefits every three years unless they are working or enrolled in job training for at least 20 hours a week. The GOP's attempt to change the eligibility requirements could affect 1 million low-income people. Republicans assume recipients don’t want to work, although many are employed. USDA data show nearly 43% of recipients live in a household where someone is working.
The USDA's website says that a single person who NETS more than $973 a month doesn't quality for SNAP. According to the Agriculture Department, the average recipient receives about $125 a month. Nearly 40% of recipients are able-bodied adults between the ages of 18 and 60, according to 2013 government data — but the other 60% are children, elderly or disabled adults. The average gross income for all recipient households is a mere $758 a month.
Jim McGovern (D-Mass.), a member of the House Agriculture Committee, said “We cannot balance the budget on the backs of poor people.”
Instead of reforming farm subsidies, the GOP always goes after the poor. The Washington Post reports that for decades farm subsidies have disproportionately benefited richer Americans. USDA spokesman Cullen Schwarz said, "It’s a loophole some folks not actively engaged in farming are using to collect farm benefits."
The Heritage Foundation claims that of those who aren't millionaires, the bottom 80 percent of farm subsidy recipients in Iowa collected an annual average of $1,565 or less. If that's true, it's not very much. But according to the Heritage, the majority of agricultural subsidies nationwide go to commercial farms with average incomes of $200,000 and net worths of nearly $2 million — so why would they need any subsidy at all? Especially if those with incomes of less than $758 a month are going to be penalized just for being poor?
But with a GOP rule change for SNAP, a single man or woman of any age (without children) with a meager monthly income of only $973 or less can only receive an average of $125 a month for 3 months. They will be able to eat for 90 days — then after that, they're on their own.
FLASHBACK 2007 (USA Today) "Members of the House who crafted a controversial $286 billion farm bill up for a vote today comprise about a tenth of the chamber, but their districts have reaped 42% of the benefits of past crop subsidies." And yes, Rep. Mike Conaway, who is pushing for cuts in food stamps, is on the list — over $300 million times.
The Tea Party tool (Dr. Ben Carson, the neurosurgeon and Fox News regular) is building a campaign team for a potential 2016 presidential run. Yet he too was once on food stamps. But while Ben Carson himself may have grown up on welfare, he's now espousing policies that make sure other people can't get on welfare.
The GOP also wants to drug-test people (like Dr. Ben Carson) who apply for food stamps and public assistance, even thought drug testing shows a decline in positivity rates. But the GOP won't drug test Tea Party members of Congress who get farm subsidies. Why is that? And for that matter, members of Congress get their salaries ("government benefits") from tax revenues as well, so shouldn't they also be drug tested? After all, not too long ago one Tea Party member was busted for selling cocaine!
Even the former vice-presidential candidate Paul Ryan supported himself with Social Security benefits from his deceased father. But just like all the other GOP hypocrites — now Paul Ryan and the GOP wants to cut Social Security for everyone else — while also cutting taxes to the bare bone for the very rich — to starve our government of revenues to achieve their ultimate goal. This has always been the typical GOP way of governing — feed the rich to starve the poor.
* Related Post: Why won't Paul Ryan listen to Nick Hanauer?