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Nov. 3, 2017, 1:29 p.m. EDT

Republican tax reform is simply red states stealing from blue states

Who would pay more under the GOP tax plan? The Northeast and West Coast, by design

By Brett Arends, MarketWatch

Drew Angerer/Getty Images
Paul Ryan, left, has pushed the Republican tax-reform plan like no one else in the House.

What the Republicans unveiled in Washington may look like a welcome, long-overdue simplification of the tax code.

But don’t be fooled. It’s actually a Trojan horse. It is designed to give away money to the children of the super rich, to the religious right and the so-called red states that are most loyal to the Republican Party.

And it will do so by punishing those who are disloyal to the “pro-America” party and insist on voting Democrat.

This isn’t tax reform. This is the imposition of tribute on an occupied people.

Once you realize that blue states are already paying way too much money, it’s obvious that a bill that jacks up their bill further isn’t reform.

And before I go any further, let me say: I really wanted to support this reform. I hate the current tax code. It is an overcomplicated fiasco and an absurdity. I am all in favor of a sweeping, 1986-style radical reform and simplification. Nor do I think progressivism is the only thing that matters.

So I like the way this tax reform wants to simplify the ordinary income tax codes.

I like the corporate tax break on repatriating money held abroad.

I like encouraging corporations to invest by letting them write off the full cost up front.

Do the math: The Trump tax calculator — will you pay more or less?

And, perhaps controversially, I like the cut in corporate taxes. Actually, if I had my druthers, they’d scrap the corporation tax altogether. It is a crazy tax that makes no sense and causes all sorts of unintended problems. Democrats support it for the wrong reasons. It’s not even progressive. It’s a flat tax. Bill Gates effectively pays the same rate (percentage, not total amount) as your grandma.

Cynical plan

But for all these positives, this tax reform is shockingly cynical, evil and vicious. If the Republicans pass it, they will have confirmed what we have long suspected: That they don’t view the so-called blue states, such as the Northeast and the West Coast, as the “real America.” They view them as colonies.

Why so?

Start with the elimination of the federal income tax deduction for state taxes, and the drastic reduction in the deduction for local taxes.

Republican propagandists are out there right now saying this will end the system whereby supposedly virtuous low-tax (red) states subsidize feckless, socialist (nay, “socialistic,” or even,”socialistical”) high-tax blue states.


Red states are ‘takers’

It is an undisputed fact that the subsidies flow in exactly the other direction. States like New York, New Jersey, Massachusetts and California pour vastly — vastly — more into the federal government in taxes than they ever get back in federal spending.

If the blue states of the Northeast or the West Coast declared independence, their residents could immediately enjoy a massive tax cut.

Tim Mullaney: Don’t blame Trump for this mess of a tax bill

This fact is so well-established that even the Tax Foundation, the very conservative think tank, acknowledges it is the case. Every year the Tax Foundation used to publish research that detailed the shocking facts — until, dismally, its conservative-leaning, red-state-friendly donors stopped supporting the project.

So once you realize that the blue states are already paying way too much money, a bill that jacks up their bill still further isn’t reform. It’s tribute.

No wonder red state Republicans were out there gleefully and knowingly lying about it.

That’s not the only problem, either.

The new feudalism

This tax “reform” also includes the obscenity of abolishing the inheritance tax. We will become a society where a dollar earned is taxed far more heavily than a dollar inherited.

Welcome to the new feudalism.

Then there’s this special tax privilege for the pseudo-religious proxies of the far right. The reform, by scrapping the so-called Johnson Amendment, would allow “churches,” loosely defined, to operate formally as political advocates while still enjoying tax exemptions.

Most real churches stay clear of politics. The main beneficiaries of this will be the pseudo-Christian Haters for Jesus you meet online.

Oh, yeah, and on top of all this is the deliberate, punitive attack on college education. The tax bill will raise taxes on university endowments and on college graduates trying to pay off their student loans.

Do you think this is an accident? Do you think this is pure chance that the Republicans are simultaneously cutting taxes on right-wing political “churches” and raising taxes on more liberal, blue-state colleges?

Never forget that a key determinant of how someone voted last year was whether they went to college or not. As the president said early last year: “We love the poorly educated.” Indeed.

None of these massive giveaways to the Trump-GOP coalition is free. In total, this bill is estimated to gut federal tax revenues by $1.5 trillion over the next 10 years.

Social Security, Medicare and Medicaid already face funding crises. Do the math.

Bottom line? If this passes, your Social Security and other benefits will end up being cut, in order to pay for giveaways to Ivanka Trump, Jerry Falwell Jr. and a lot of Welfare Republicans down south and out west.

No, it’s not OK.

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