Paul Krugman explains why the republicans are pushing a tax plan that would be bad for the economy and most that participate in the economy. “we’re talking about government of the people, not by the people, but by wealthy donors, for wealthy donors. Everyone else hates this plan — and they should.”
Key Points: [The republican] claim is that cutting taxes on corporate profits would lead to an explosion in private investment and faster economic growth.
…so where does the money for that increase in capital expenditure come from? Nothing in the bill would make Americans consume less and save more. So the money would have to come from abroad — from selling stocks, bonds and other assets to foreigners, on a massive scale. … this inflow of foreign money would drive up the value of the dollar and lead to huge trade deficits, more than $6 trillion in deficits over the next decade.
… about that economic growth: Foreign investors would be earning profits and taking them home. So much — probably most — of any growth we would get from cutting corporate taxes would accrue to the benefit of foreigners, not Americans.
Most serious economic analyses agree with those C.E.O.s who disappointed Gary Cohn: Corporate tax cuts wouldn’t actually do much to raise investment. They would, however, explode the budget deficit.
So in an attempt to limit that deficit blowout, Senate Republicans are proposing significant tax increases on working families. In fact, according to Congress’s own Joint Committee on Taxation, taxes would rise on average for every group with incomes under $75,000 a year, and would surely rise for many families even in higher-income groups. The only significant winners would be those making more than $1 million a year. Populism!
… this doesn’t even take account of the health care sabotage that’s an integral part of the Senate plan. By repealing the mandate — the requirement that people purchase insurance — the plan would, as I said, cause 13 million to lose coverage
[in addition to all of this] tax-cut-induced deficits would, by law, trigger cuts in Medicare, and this would just be the start of a G.O.P. assault on programs like disability insurance that provide a crucial safety net for millions of working-class Americans.
All of which raises the question, why are Republicans even trying to do this? It’s bad policy and bad politics, and the politics will get worse as voters learn more about the facts. [the answer] donors are basically saying get it done or don’t ever call me again. [we are becoming] ”a government of the people, not by the people, but by wealthy donors, for wealthy donors. Everyone else hates this plan — and they should.”