Two weeks ago I composed
a seriously considered, and yet a mockery, of the Republican's common
call for tax
returns to fit on a postcard. As expected, the
Republican
plan fails this criteria, as it fails to cut
middle class taxes. A quick outline of what their tax plan does.
It...
Weakens the Affordable Care Act by
eliminating the individual
mandate. The CBO claims this will increase
health insurance prices by ten
percent as healthier, young citizens opt out,
leaving older citizens paying more for healthcare.
Repeals the Estate
Tax and Alternative
Minimum Tax (the only reason the President,
a billionaire, paid taxes in 2005) which only
effect the very highest earners.
Opens up Alaska's Arctic
National Wildlife Refuge for
drilling.
Reduces corporate taxes from 35% to
20%, even though international companies are not contributing
a dime, like General Electric, Apple, and Priceline.com.
Increases the National Debt by 1.5
trillion over ten years (Undoubtedly this will be have to be paid for
somehow. After passing this gift to corporations, Republicans will
immediately remember the deficit, clamor to cut social services, and
refuse to extend crucial
programs like Children’s
Health Insurance Program).
A majority
of middle class Americans will get 1.25% back
on the tax return in 2017, but a third
will see increased taxes. Unlike the corporate
tax reduction, which is permanent, these tax cuts will be phased
out in 2025. Meanwhile, the top five percent of earners will
receive 3% back, and these tax cuts will remain past 2025.
And why? Why deliver a massive cut to
international companies already dedicated to avoiding taxes, to give
a small tax cut to the middle class which will then be clawed back
ten years later, to offer a tax cut to millionaires and billionaires?
Supposedly,
so the United States can compete internationally. But corporations
based in the United States are accumulating record setting
profits!
Yet it's true, many multinational
corporations are trying to hide behind loophole tax laws in various
countries. An example of the absurdity of the situation: The
European Union is suing the member state of Ireland, to force
the Irish government to collect taxes from Apple. Apple has harbored
in Ireland to avoid taxes incurred globally, and Ireland is refusing
to recover these taxes, but the EU has ruled Ireland's agreement with
Apple is illegal state aid.
The Republican tax reform is part of
the global race to the bottom for multinational corporations, funded
by a deficit which will be repaid by devastating social services and
the most desperate who rely on them. Its purpose isn't to make
American based corporations more competitive, but to provide the
biggest return to millionaire and billionaire shareholders.
But this race to the bottom isn't only
occurring internationally. Its also happening between those
laboratories of democracy, the states.
Take for instance, the Carrier
deal which the President and Vice President
brokered the air conditioning company in the state, and retain
employment. Though Carrier
agreed to keep two thirds of the 1,500 jobs it intended to move
overseas, it cost the state of Indiana seven million dollars in
incentives. In the fight to house General Electric (a criminally
negligent
company
when concerning
the environmental damage it has wrecked), Massachusetts handed
over a massive amount in incentives.
The same could be said for the Commonwealth's attempt to lure
Amazon's second hub, which includes Worcester's five
hundred million tax incentives.
It's
a bad deal. But there is a solution, and it
comes from the Constitution.
Article I, Section 8, Clause 3, says:
The Congress shall have Power …. To
regulate Commerce with foreign Nations, and among the several States,
and with the Indian Tribes.
That's right, the Commerce Clause.
Here's the theory. The Commerce clause
has a very broad definition. It was the outgrowth of a particular
failure of the Articles of Confederation. Prior to the Constitution,
States competed by implementing tariffs against each other. Each
state did everything within its power to gain an advantage over the
other states, even if it meant paralyzing the Federal Government.
With the Constitution, the National Government could overrule this
petty and unproductive behavior.
As Justice
John Stevens wrote in Gonzales
v. Raich (a
case which said states could not leagalize medical marijana over the
objection of the National Government):
The Commerce Clause emerged as the
Framers' response to the central problem giving rise to the
Constitution itself: the absence of any federal commerce power under
the Articles of Confederation. For the first century of our history,
the primary use of the Clause was to preclude the kind of
discriminatory state legislation that had once been permissible.
Then, in response to rapid industrial development and an increasingly
interdependent national economy, Congress “ushered in a new era of
federal regulation under the commerce power,” beginning with the
enactment of the Interstate
Commerce Act in 1887 and the Sherman
Antitrust Act in 1890.
Stevens'
point? To demonstrate the expansive historical power of the Commerce
Clause, and its ability to supply essential Constitutionality to
issues such as medical marijuana, environmental
regulation,
and the
individual mandate.
Its original purpose was to prevent discriminatory state laws, and
has been used to bust trusts and protect workers.
A well intentioned
White House would employ the Commerce Clause to curtail this race to
the bottom, which is a undeserved gift to corporations at a cost to
citizens. It would challenge these tax incentives to prevent undue
competition between the states. Competition which brings jobs, but
burdens the citizens of the states, allowing incredibly wealthy
corporations to avoid paying their share of the costs of a civilized
society.
And (one can
dream), if the White House was really worried about global
competition, as it claims it is, would engage in diplomacy, (using
the State
Department it's shredding) to discuss clamping down on tax
havens (both personal
and corporate), and loop holes which prevent the wealthiest from
paying to live in a society where the poorest respect their wealth.
But
the current Administration, instead of crafting a tax reform which
benefits the middle class,
is eager to hand over more of the nation's wealth to themselves.
The
CBO has scored the Republican Tax bill: 1.4 trillion added to
National Debt over ten years, reduces the number of citizens with
health insurance, and large tax cut for the wealth with only minimal
effect for the middle class.
Recent:
Relevant:
Comments
Post a Comment