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Tax bill’s details shift, but overall it’s a colossal tax break for corporations and the wealthy

In 10 years, the wealthier you are, the more likely you are to end up benefiting. The poorer you are, the less likely. The slope of the bar graphic illustrating this is staggering.

Rep. Keith Ellison speaking during a rally against the Republican tax bill on Capitol Hill on Nov. 15.
REUTERS/Aaron P. Bernstein

Our Congress is pretty dysfunctional, in a lot of ways. We, collectively, must take a share of the blame, since we elect its members. I don’t have too many great ideas for making it better, but I would, in a flash, support a pretty tough congressional rule that would prohibit either house of Congress from voting on a bill without the benefit of a Congressional Budget Office (CBO) analysis of its likely fiscal impact.

I haven’t written about the Republican tax bills currently making their way through Congress. It’s a very big deal, of course, if any of these versions become law. But, in addition to there being a House and a Senate version, with significant differences, each of the drafts has gone through significant changes, on the fly and mostly in the dark, as the Republican leadership makes backroom deals to secure support from waffling members while going to impressive lengths to keep Americans from being able to figure how the changes will affect them.

So it’s hard to get an up-to-date, neutral, expert analysis of who gets tax relief and how much (and for how long since many of the provisions are scheduled to disappear after a few years) from the big tax bills.

But the big impact is pretty obvious.

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In the long run, the overhaul, if it resembles remotely the basic design in either the House or the Senate version, will be a colossal tax break for corporations and the millionaire/billionaire classes.

That’s what’s going on, and the backers of all versions of this bill (the bill is supported by no Democrats and the overwhelming majority of Republicans in both houses) would like to rush it though before the general public fully understands how great this bill is for corporations, the owners of those corporations and the relative few richest individuals, and how bad it is for the majority of American families and for the long-term debt and deficit picture.

I suspect you’ve heard and read this point before, but many provisions in the bill that do the most good for poor and middle-class Americans are set to disappear after a few years, while most provisions that benefit corporations and the wealthiest families are permanent.

If someone were trying to sell you something that would benefit you in the short term but would benefit him for the short, medium and long and forever terms, I hope you would know how to feel about it. But, of course, the salesman won’t tell you that up front, or ever. You might need someone who doesn’t stand to make a commission on the deal help you figure that out.

Honest, credible, nonpartisan analysis

In federal fiscal matters affected by proposed legislation, that someone would be the Congressional Budget Office. The fact that the CBO works for the Congress might understandably make you a bit nervous. But during its more than 40 years of existence the CBO has established a reputation for honest, credible, nonpartisan expert analysis so Congress and the public can have an informed debate on bills before they become law.

So you may be shocked, shocked (that’s a “Casablanca” reference) to learn that one version of the big tax bill has already passed the House of Representatives (over the opposition of all House Democrats, including all five Minnesota Democrats, and with the support of almost all House Republicans, including all three Minnesota Republicans) and another version is being rushed through the Senate (over the opposition of all Senate Democrats and with the support of almost all Republicans) without either version having been “scored” by the Congressional Budget Office.

The CBO is the highly regarded, nonpartisan agency whose job it is to help Congress figure out the likely impact of complicated fiscal matters when a bill like these tax bills is making its way through Congress.

So, as I said at the top: If I had my way, and if Congress cared about letting the country know what it’s up to before it’s too late, there should be a rule (with some kind of reasonable exception for national emergencies) requiring a published CBO analysis before a final vote in either house.

But, if members of Congress want to ram through bills without the benefit of that analysis, I would say they lose their right to complain about the analysis of others that fill that void by publishing their own efforts to project the likely impact of complicated fiscal bills.

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A telling graphic

So, what set me off on this particular subject was a graphic in a piece by New York Times columnist Dave Leonhardt. Piggybacking on an analysis of the current Senate version of the tax bill by the Tax Policy Institute (a joint operation of the Brookings Institution and the Urban Institute) the graphic estimates who will end up with an actual decrease in their federal taxes in 10 years, when the provisions have been fully phased in, and then when the ones that are set to expire will have been phased out.

You can guess where this is going. The wealthier you are, the more likely you are to end up benefiting. The poorer you are, the less likely. The slope of the bar graphic is staggering.

If you are among the top 0.1 of one percent wealthiest Americans, the chance that you will still be benefitting from the bill in 10 years is 98.1 percent.

If you are only in the richest 1 percent, there is an 83 percent likelihood that you are benefitting in year 10 of the phase-in/phase-out of provisions in the bill.

As you move toward those with lower incomes, and you move into income regions in which most Americans live, the likelihood that you will get any benefit continues to decline.

If your family is in the middle fifth – we’re not talking about poor people, we’re talking about the millions of families in the middle of the income scales – the chance that you are paying less in taxes in 2027 falls to 27.5 percent. Just to emphasize: That’s not the size of the tax cut families in that group get. That’s the chance that a family in that most middling quintile gets any benefit at all from the big cut. That likelihood drops to 27.5, which means 72.5 get no benefit from this once-in-a-generation tax overhaul that candidate Donald Trump said would not help him nor his fellow billionaires at all, but would do wonders for the struggling middle and working classes.

The slope continues

The slope continues all the way to the end. Of course, families in the lowest quintiles pay relatively little in federal taxes now, conservatives will be happy to point out.  But they are also the ones who need help the most with paying their bills, liberals will point out. Anyway, in case you don’t click through to see the graph, 11.8 percent of those in the bottom quintile will get some benefit in year 10, compared to 98.1 percent of those in the top 0.1 percent, and 83 percent of those in the top 1 percent.

In case that analysis is wrong and/or liberally biased, let’s wait for the CBO analysis before rushing anything through. Deal?

Here’s the graphic as published by the Times.

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And here’s the original study by the Tax Policy Center on which it’s based.

Oh, and Happy Thanksgiving to all MinnPost readers.