Michael Battalio

Friday, December 15, 2017

Letter to Congressmen on the Tax Cut and Jobs Act

It is almost unfathomable that the Senate is considering tacking a repeal of the individual mandate to the tax bill.  It’s like you think you can add the approval ratings together for these two unpopular bills.  That isn’t how it works.  You’re taking an unpopular and regressive tax bill and pairing it with a reduction in healthcare.  Now, I’m fully aware that the individual mandate is forcing people to get health insurance who don’t necessarily want it.  That is the whole point.  The rest of us pay for the healthcare of the healthy in hidden ways, and making them get insurance forces the healthy to pay attention and internalize the risk.  This also broadens the risk pool and lowers rates for the sick.  

I write again to encourage the Senator to vote against the tax bill.  The Joint Committee on Taxation has released the estimated changes in income for taxpayers in the year 2027 with this revised bill.  Everyone in the middle class is getting a tax increase to partly fund tax decreases for the wealthy.  This is an estimate from the Congress itself.  This is especially true given the recent changes to the bill that eliminate the individual tax cuts temporary to make the corporate cuts permanent.  Counting on future Congresses to fix this debacle of a bill is naive at best and idiotic at worst.  

Now, I am not necessarily completely against paying slightly more in taxes.  I believe the government does good overall.  I am strongly against what my additional money will be used to fund.  Corporations and the very rich do not need a tax break, especially egregious is the addition of a deduction for the maintenance of private jet aircraft.  While the nominal rates are high compared to other developed economies, the effective taxes rates are below the average.  We certainly all need a simplification of the tax code, but that is not what the House or Senate bills do.  Reducing the number of tax brackets doesn’t simplify the code.  Reducing the corporate tax rate would be great if you eliminated the innumerable credits and deductions they take (i.e., actually simplifying the code), but you are doing one without the other.  It’s irresponsible and lazy.  Time and time again, the GOP has tried this tactic, and corporations don’t reduce costs of products or increase the salaries of workers.  They return the money to investors, which is their fiduciary responsibility.  I don’t blame them.  I blame you and the rest of the GOP for being naive.  You want a popular tax bill?  Raise the standard deduction slightly without screwing with everything else.  Pay for this by closing loopholes that Wall Street and the ultra-wealthy use (and there are plenty of them to choose from, like the ability of some investment bankers to have their income taxed at the capital gains rate instead of what the rest of us pay–carried interest–interestingly, one of the things your bill doesn’t touch even though the President railed against it in the campaign.).  This is common sense and would be very popular.  It may cost you some campaign contributions, but it will improve the lives of your constituents.  And isn’t that the point?

To make it more clear, I will say that I will carefully compare my tax bill from this year to my bill next year.  The amount of money my taxes increase I will set aside an equal amount of money and give to your closest political opponent both in the primary and the general.

I’m sure the Senator is aware of all of this and doesn’t care, but at some point the rest of us just have to say, “No, this is wrong.”  Eventually we will get the point across.  I hope this makes some small difference.

I’ll end just by quoting the New Quinnipiac poll:
25% approve of the tax plan.
16% think the GOP plan will reduce their taxes.
61% say it will benefit the wealthy most
24% say it will help middle class the most.

Thankfully, despite the false narratives the GOP is putting out, people are paying attention.  While the GOP doesn’t seem willing or able to deal with the numbers in your backwards tax plan, these are much more clear.  I wonder what the poll numbers will look like in 2020 when people’s taxes really start going up and corporate profits skyrocket with little return to consumers.  Good luck.

Thank you.

Michael Battalio

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