In the first year, 2018, the changed inflation rate raises a relatively

modest $31.5 billion but it grows every year, reaching $37 billion in
2027. “To be sure,” Hemel wrote, “this affects everyone to some degree,
but most of the burden is paid for by families in the bottom four
quintiles.”

In the long term, Hemel argued,

this is a very subtle way to increase taxes on the lower and middle classes and
then use those revenues to pay for a massive tax cut for corporations.

What may prove even more significant is that the shift to chained CPI —
a less generous, slower-growing measure of inflation than the one
currently in use — would not only result in a tax increase over time, it
would set a precedent for Republicans who would like to use the same
method to pare back so-called entitlement programs like Social Security
and Medicare. It is, in effect, a backdoor method of reducing benefits for
the elderly and the disadvantaged without public scrutiny or debate.

This full-speed-ahead strategy simultaneously constrained the ability of

the press to explore the special interest provisions buried in the
legislation.

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One exception is the work of three reporters from International Business

Times — Alex Kotch, David Sirota and Josh Keefe — who have pursued
this line of inquiry for the past week. A recent story disclosed that a
provision inserted at the last minute into the bill stands to lower taxes on
the income of 14 Republican Senators.
 Along parallel lines, a liberal think tank, the Center for American
Progress, now estimates that Senator Ron Johnson, Republican of
Wisconsin, will get an annual tax break of somewhere between $21,500
and $205,000 based on his 2016 financial disclosure statement. The
center’s calculations are based on Johnson’s reported income from three
holdings he said produced a minimum of $215,002 up to a maximum of
$2,050,000.

And the 2016 financial disclosure statement filed by Senator Steve

Daines, Republican of Montana, shows income from real estate holdings
of $487,500 to $4,305,000. If Daines’ tax cut is computed using the
same method that the center used for Johnson, it would be between
$47,582 and $430,500.

Not only are many senators direct beneficiaries of the legislation, but 15
of the top 20 Senate recipients of contributions from the real estate
industry are Republicans, according to Open Secrets, ranging from
Marco Rubio at $3.27 million to Chuck Grassley at $276,636.

Perhaps most important, the measure rewards those who need it least—
the very wealthy — while leaving those most in need with modest and
temporary tax breaks. The bill will diminish opportunities for social
mobility by doubling the estate tax exemption, further entrenching
generation after generation at the top of the income distribution.

As my colleague Jim Tankersley put it on Dec. 16, the final version of the
legislation

offers little redress to workers who have grown to believe that the country’s tax
law thicket advantages those with power, political connections and lawyers on
retainer. Its evolution undermines a central selling point for a bill that is
already seen by most Americans as unlikely to benefit them, according to polls.

The accompanying chart, which is based on an analysis done by the

nonpartisan Tax Policy Center, describes the distribution of the benefits
by income groups over the next decade.

Continue reading the main story

Continue reading the main story
Tax Bill’s Winners Were Already Doing Plenty
of Winning
The biggest tax windfalls will go to various slices of the richest 20 percent of
American households. The poorest will eventually see income losses.
Percentage change, from current law, in after-tax income:
Income
quintile
Income
(2017 dollars)
In 2018
In 2025
In 2027
–0.1
Bottom
+0.4%
+0.4
0 to $25,000
–0.1
Second
+1.2
+0.9
$25,000 to $48,600
0
Middle
+1.6
+1.3
$48,600 to $86,100
0
Fourth
+1.9
+1.4
$86,100 to $149,400
Segments of the top quintile:
80-90
+2.0
+1.4
+0.1
$149,400 to $216,800
90-95
+2.2
+1.5
+0.1
$216,800 to $307,900
95-99
+4.1
+3.2
+0.2
$307,900 to $732,800
Top 1%
+3.4
+2.9
+0.9
$732,800 to $3,439,900
Top 0.1%
+2.7
+2.7
+1.4
More than $3,439,900
By Bill Marsh/The New York Times | Source: Tax Policy Center
Despite the fact that the measure is a tax cut, the majority of Americans,
53 percent, currently disapprove of the law and 35 percent
approve, according to a CBS Poll. Most Americans believe the bill will
help large corporations (76 percent) and the wealthy (69 percent), while
35 percent believe it will help the middle class and 24 percent said their
own families will gain.

A tax expert who insisted on anonymity in order to protect client

confidentiality, emailed me his critique of the bill:

(1) The corporate rate reduction is permanent, for individuals only temporary.
Completely obnoxious. In effect the money “saved” within the 10 year budget
window by making those individual cuts temporary helped to underwrite the cost
of making the corporate/pass though side permanent

(2) Carried interest provision. When Trump was careening around in his populist
candidate mode, he promised to end it. Here is one campaign promise that he
“somehow” failed to redeem when the clear and available chance presented itself.

(3) Restriction on state and C local tax deduction — consciously vindictive

imposition of double taxation on citizens of certain Democratic states;
corporations and pass through businesses, the darlings of the Republicans, still
get to deduct those very same taxes in full.

(4) Expanding the standard deduction but financing the cost of so doing by
repealing the personal exemptions is a bit of a bait and switch maneuver. Some
people might be worse off.

(5) In a bill in which 100s of billions of dollars were sloshing around to provide
steep tax cuts for already wealthy and highly prosperous corporations and pass
through businesses, the Republicans could only find the will to raise the
refundable portion of the child care tax credit from $1000 to $1400. Rubio
wanted it to be raised to $2000 and his Republican brethren refused to even
meet him halfway. Pitiful.

(6) Deduction for extraordinary medical expenses — retention of this deduction

did not even get the five-year sunset window applied to all the other individual
tax provisions, two years only. Vicious.
(7) Pass through business taxation — the bill is a massive tax gift to some of the
wealthiest people in the country, who are conducting business operations in non-
corporate form or are investors in same.

The tax bill not only alters the competitive structure of American
industry but includes such major provisions as opening the Arctic
National Wildlife Refuge in Alaska to oil drilling and the elimination
of mandatory individual health insurance under Obamacare.

What amounted to three major pieces of legislation were approved by the

full House and the Senate Finance Committee, “two weeks after the bill
was unveiled, without a single hearing on the 400-plus-page legislation,”
as Thomas Kaplan and Alan Rappeport put it in The Times.

How well does this procedure stand up to the requirements Senator Ben
Sasse specified in his maiden Senate speech on Nov. 3, 2015? In it, Sasse
argued that the Senate was failing in its responsibility to fully air and
debate the important issues before the county, calling for what he called
“a cultural recovery inside the Senate”:

One of our jobs is to flesh out competing views with such seriousness and respect
that we should be mitigating, not exacerbating, the polarization that does exist ...

Good teachers don’t shut down debate; they try to model Socratic seriousness by
putting the best possible construction on arguments, even — and especially — if
one doesn’t hold those positions.

Or, for that matter, how well does the bill fit with Senator John McCain’s
determination to lay down the law on “regular order,” as outlined in an
Aug. 31 op-ed in the Washington Post? “We are proving inadequate not
only to our most difficult problems but also to routine duties,” McCain
wrote. Or as McCain noted during the debate over legislation to repeal
Obamacare, he was calling

for a return to regular order, letting committees of jurisdiction do the principal

work of crafting legislation and letting the full Senate debate and amend their
efforts. We won’t settle all our differences that way, but such an approach is more
likely to make progress on the central problems confronting our constituents. We
might not like the compromises regular order requires, but we can and must live
with them if we are to find real and lasting solutions.

So far, however, only one Republican senator has suffered real costs for
deciding to vote for the tax bill.

Just over two months ago, Bob Corker drew a line in the sand on the bill:
if it raised the deficit, he would vote no:
No way that Bob Corker is going to vote for a tax reform bill that I think in any
way is going to add to the deficit. It’s not going to happen, never. It’s never going
to happen. Never, never, ever.

On Oct. 5, Susan Davis of National Public Radio put Corker on

recordwith a series of quotes that he may have come to regret:

This is the most passionate thing for me, period, that I work on. Not foreign
policy. Not banking. It’s this deficit issue.

For Corker, this issue went way beyond routine politics: “Deficits
matter,” he forcefully asserted. “They are a greater threat to us than
North Korea or ISIS.”

969COMMENTS
This past week Corker has decided that the deficit is no longer “the most
passionate thing for me.” Instead, he voted for a tax bill that will increase
the deficit by $1.46 trillion over ten years. In a statement, Corker
declared:

In the end, after 11 years in the Senate, I know every bill we consider is imperfect
and the question becomes is our country better off with or without this piece of
legislation. I think we are better off with it.

All of this raises a basic question. How could nearly every Republican
representative — and all 52 Republican senators — support the tax bill?
The best answer may be the most cynical: because it benefits key leaders,
their friends, their heirs and their donors.

After looking at the legislation in its entirety — its substance and the
procedures used to get there — it is difficult to conclude that the
motivations of its sponsors are either benevolent or somehow in the best
interests of the country. More likely it is hypocrisy and venality mixed up
into one awful bill.

Correction: December 21, 2017

An earlier version of this column misstated the given name of a law professor at
N.Y.U.; he is Mitchell Kane, not Michael Kane.
I invite you to follow me on Twitter, @Edsall.

Follow The New York Times Opinion section on Facebook and Twitter
(@NYTopinion), and sign up for the Opinion Today newsletter.

Continue reading the main story

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