Editorial: Tax-cut bills are milestones in the history of American plutocracy

Well, of course it wouldn’t pay for itself. Since details began to emerge last summer, every independent analysis said it wouldn’t. Nearly every economist from across the political spectrum agreed. The notion that corporations and wealthy Americans, who would receive the vast majority of the benefits, would invest their windfall in ways that would trickle down to the rest of America was always the big lie at the heart of this legislation.

But it wasn’t until Congress’ Joint Committee on Taxation projected Thursday that the bill would add $1 trillion to deficits over the course of a decade — even after accounting for economic growth — that a couple of Senate deficit hawks began to have second thoughts. Not coincidentally, both of them, Bob Corker of Tennessee and Jeff Flake of Arizona, aren’t seeking re-election. They were thus free to ignore the Republican donors for whom this tax-cut bill is a massive payoff.

Senate leaders spent Friday seeking ways to finesse Corker and Flake. Senate Majority Leader Mitch McConnell said the bill had enough votes to pass. The next step will be reconciling it with the version that the House passed Nov. 16.

Both bills contain different horrible things, but the overall implications are the same: Most people will see lower taxes next year, but by 2027 most individual tax cuts will expire. The result, says the Congressional Budget Office: Lower-income taxpayers will jointly pay $5.3 billion more in taxes, and those earning $1 million or more will pay $5.8 billion less.

This is staggering: A donation of $5.3 billion a year by lower-middle class workers to the richest 1 percent of Americans.

These bills are milestones in the history of American plutocracy — a government run by wealthy people for the benefit of wealthy people. It’s no coincidence that income inequality in America began accelerating in the mid-1970s, the same time that the U.S. Supreme Court declared, in Buckley v. Valeo in 1976, that limiting political campaign donations violated the First Amendment.

The Buckley decision and subsequent “money is speech” decisions created today’s era of unlimited, and often anonymous, campaign donations that are behind this irresponsible tax bill.

GOP legislators are pushing these tax bills largely to placate corporations and other wealthy donors. A few were honest enough to admit it. Sen. Lindsey Graham, R-S.C., said “financial contributions will stop” if the Senate failed to pass tax cuts. Rep. Chris Collins, R-N.Y., said “My donors are basically saying, ‘Get it done or don’t ever call me again.’”

On Thursday, Republican Sens. Marco Rubio of Florida and Mike Lee of Utah floated the idea of setting the corporate tax rate at 22 percent instead of 20 percent and using the savings to help low-income parents. Lobbyists for Charles and David Koch’s network of donors immediately fired off a letter warning them not to.

Will companies use their savings to invest in new plants and higher wages for workers? Probably not, according to surveys and business analysts. Executives say their first priority is to increase dividends for shareholders or buy back their own shares. Eighty percent of all stock is held by the richest 10 percent of Americans. Buybacks reward them with a nice gain, and executives can get nice bonuses. But the money isn’t used to expand the business or pay higher wages. So forget trickle-down.

As President Donald Trump likes to boast — even as he says businesses suffer from high taxes — major stock market indices are at record highs. U.S. companies are awash with nearly $2 trillion in cash. If they were going to invest in new American plants and jobs, they could have done it by now.

This tax-cut bill is simply sheer greed, an effort by those whom Theodore Roosevelt called “malefactors of great wealth” to escape more of their obligations to the society that enabled them to prosper. It is shameful. But that’s the way plutocracy works.