Solveig Torvik

A pair of tricked-out turkeys, gobbling nonsense, waddled ashore from the murky swamps of the Potomac this Thanksgiving season.

We used to rely on Republicans to flap their wings and throw squawking hissy fits whenever federal spending promised to outrun income. But now the Republican-led House and Senate propose tax bills creating deficits of at least $1.5 trillion over the next decade. Sounder minds, such as those at the Committee for a Responsible Federal Budget, argue it will be $2.2 trillion if pesky details like interest on the debt are included. 

Why this hurry to pass a tax bill without doing proper due diligence? Hearings? Budget scoring? Hello?

Even some Republicans warn that this Republican math-challenged madness isn’t as mindless as it seems. Rather, it’s a carefully designed trap to achieve the long-sought right-wing goal of “starving the beast” of tax funds, thus automatically triggering mandatory cuts in “beastly” entitlement programs such as Social Security and Medicare.

A trick, in other words.

Republicans’ ostensible beef with the tax code is that at 35 percent, American corporations have the world’s highest tax rate. This, we are told, puts them at a competitive disadvantage; foreign corporations pay around 19 percent. So we must lower the corporate tax rate to 20 percent. Sounds sensible.

Except for this awkward fact: American corporations do not pay 35 percent tax. They pay an average combined federal-state tax of 18.1 percent.

Proof of our corporations’ bottomless suffering can be found in offshore tax havens, where Apple, Microsoft, etc., defer payment of taxes and have stashed $2.6 trillion in untaxed profits.

So what do the rich get? Take our president. (Please.) The House bill eliminates the estate tax paid by the rich in 2024. Until then, that tax is cut in half. Upon Donald Trump’s death, elimination of this tax may be worth an estimated $1.1 billion to his offspring.

Plus, the “alternative minimum tax” (AMT) that forces the rich to pay a minimum tax also was eliminated in the House bill. Leaked documents show the AMT was responsible for $31 million of the $38 million Donald Trump paid in federal taxes in 2005. Oh.

In addition, the “pass through business” tax rate will be lowered. It allows business profits to pass to a company’s owner, who pays taxes on those profits using the lower individual taxpayer rate. For Trump, who controls roughly 500 qualifying firms, this “reform” may provide a savings of another $16 million a year, according to the Guardian. And so on.

Trickle-down fantasies

But what about the rest of us?

The gladsome news is that we too will prosper. Our standard deduction rates may nearly double. Both bills provide couples filing jointly a standard deduction of $24,000, up from the present $13,000. But likely not for long.

The tax cuts for the rich and their corporations are permanent. Cuts for the rest of us will end within four or five years, if the Senate prevails. Then our taxes would increase.

Even so, how can we not rejoice? If companies get lower taxes, lawmakers — though not the companies themselves — promise that these companies will invest their tax savings to create more, and better-paying, jobs. This will raise our household incomes by $3,000 to $7,000 a year, Republican soothsayers predict.

Been there, done this, people. It’s the same discredited “trickle down” wealth fantasy that led Congress to cut corporate taxes in the 1980s, promising that more jobs and higher salaries would follow. Didn’t happen. Not here then, not in Britain later. Now, as then, savings from tax cuts will pass to stockholders and corporate executives. Bet your farm on it.

Both bills let you keep your mortgage interest deduction, but the House caps it at $500,000. However, you will lose your present deductions for state and local taxes, and in the House version, also medical expenses exceeding 10 percent of your income and interest paid on student loans. The House bill allows a $10,000 property tax deduction, but the Senate wants to eliminate it.

Whose oxen Republican lawmakers judge to be most deserving of being gored is clearly revealed in these tax bills. For example: Low-income university students working as teaching assistants or researchers in exchange for free tuition will be taxed on the dollar value of the free tuition, resulting in huge tax bills that will force many of them to abandon their studies. Nice.

Plus, the Senate version will throw 13 million people off Obamacare by removing the individual mandate to purchase insurance. This frees up subsidy funds that otherwise would be used to help low-income people buy health insurance, all in the service of helping pay for the tax cuts for the rich. Even nicer.

State and local government officials meanwhile warn that eliminating state deductions will make it harder to pass measures to fund local government services that require voters to tax themselves.

Here’s Republican Bruce Bartlett, domestic adviser to that master among deficit raisers, Republican president Ronald Reagan:

Once the tax cut becomes law, warns Bartlett, “President Trump’s Office of Management and Budget will begin issuing warnings about rising deficits, financial collapse and hyperinflation unless immediate action is taken to reign them in.”

This lamentably “unforeseen” fiscal miscalculation will provide Republicans the justification to make those long desired cuts to entitlement programs. Over 10 years, their budgets count on $4 trillion in cuts to Social Security and Medicare.

Watch for it.

Solveig Torvik lives in Winthrop.

Solveig Torvik lives in Winthrop.