The U.S. House leadership’s $1.5 trillion tax bill should not be referred to as ‘reform,’ a word that carries with it positive connotations. This might be an accurate depiction for the top 1 percent and big business, but certainly not for low- and moderate-income families.
Despite keeping the top tax rate of 39.6 percent, the bill includes: a lower tax rate for ‘pass through’ income, phase-out of the estate tax over six years and a corporate tax rate cut from 35 to 20 percent. Roughly 70 percent of the benefit of corporate tax cuts goes to the top fifth of households, according to the Tax Policy Center, contrary to the ‘trickle-down’ argument spouted by those who support such cuts.
Worse yet, this sweetheart deal for America’s wealthiest will add to deficits, forcing deep cuts to programs and services — safety nets like Medicare and Medicaid, for instance — that elderly and lower-income Floridians depend on to stay afloat.
Even for working households who may see a tax cut under the plan, the severe budget reductions coming down the pipeline on the heels of the tax bill would result in a massive cost-shift to states. They would, in turn, be forced to cut areas like education and health care. In other words, any short-term benefits to middle-income families would most likely be negated in the long run as state lawmakers scramble to offset deep cuts in federal funding.
No matter how House leadership tries to spin this, the tax bill is a windfall for those who need it the least. Everyone else ultimately loses.