On Sunday, the nonpartisan Congressional Budget Office released its report on the effects of the Senate GOP tax plan, and the results aren’t pretty. According to the CBO, if this bill passes there will be a huge transfer of wealth in our country from the middle class to the rich. Nearly every American making under $75,000 a year will have less money in the long run, while millionaires like me will have more money from all our tax cuts.
The plan would also add an astounding $1.4 trillion to the national debt. That’s 1.4 trillion reasons Republicans are going to use in the future to justify cutting Medicare, Medicaid and Social Security.
Senate Republicans claim their bill is intended to help the middle class, and that tax cuts for millionaires and wealthy corporations are necessary to boost economic growth and raise wages. People who invest in job-creating businesses know that the most important factor for economic growth is customers who have the means and desire to buy their products.
The idea that this tax plan is going to help anyone beside the ultra-rich is ludicrous. Even a brief examination of their bill shows how blatantly untrue their claims are.
Yes, some middle-class Americans are going to get a tax cut, but it will be temporary and will leave millions worse off in the long run. If you make less than $75,000 a year, your taxes are going up so mine can go down.
What about those huge tax cuts for millionaires and wealthy corporations? Those are permanent. That disparity tells you everything you need to know about the bill.
To make matters worse, the Senate bill’s elimination of the Obamacare individual mandate would absolutely wreck the healthcare market. Without the mandate, health care premiums would rise across the board by about 10%, increasing costs for consumers and forcing those who can’t afford the increase to go without.
The CBO estimates that without the mandate an extra 4 million Americans would be without insurance by 2019, a number which rises all the way to 13 million by 2027. Some of those people will end up going bankrupt, and that won’t help them, the businesses where they shop or any other part of the economy besides the debt collection industry.
After years of talk about the danger of deficits and the importance of helping small businesses, this bill puts Senate Republicans’ priorities in the spotlight, and the American people (rightly) don’t like what they’re seeing. Any tax bill will naturally have winners and losers as rates are changed and loopholes are closed, but it’s striking how clearly the lines in this bill have been drawn. If you’re rich, you’re a winner. If you’re not, you’re a loser. That’s not tax reform, it’s a handout to the wealthy.
The zealous support for this bill by many Senators baffles me. Some of the bill’s loudest advocates, like Mitch McConnell of Kentucky or Tim Scott of South Carolina, represent states full of people that stand to lose if this passes. They are pushing a bill that will hurt the vast majority of their constituents, all to please a few wealthy donors. That decision isn’t just morally reprehensible, it’s political suicide.
The effects of this tax bill are clear — I’ll get a tax cut, and the middle class gets screwed. That’s apparently an acceptable tradeoff for many members of the Senate, but it’s not ok with me, and it shouldn’t be ok with the American people. This bill is an outrage, and it must be stopped.
Pearl currently serves as Chair of the Patriotic Millionaires and was a managing director at BlackRock