How are we to make sense of the new Republican tax plan? It seems quite clear that the latest version of the proposal to revise the tax code put forth by the Trump Administration and the Republican-led Congress in Washington D.C. should make it clear that Republican values are increasingly at odds with traditional, conservative American values and those of the middle class. Gradually the Republican Party has revealed itself to be increasingly aligned with endorsing and promoting the interests of a plutocracy over the rights and needs of the American people. They have cast themselves as the guardians of the interests of a small minority of wealthy citizens and corporate clients instead of being the champions of the middle class.
To understand the strategic direction of Republican politics, I would direct readers to a somewhat obscure but quite legitimate series of internal memos distributed in 2005 and 2006 by Citicorp to their richest investors that outlined “the rule of the top 1 percent.” These memos were drafted by Citicorp’s equity analysts. The first memo from October 16, 2005 was entitled “Plutonomy: Buying Luxury, Explaining Global Imbalances” (thirty-five pages long). The second was issued March 5, 2006 and was entitled “Revisiting Plutonomy: The Rich Getting Richer” (eighteen pages long). These were memos that Citicorp circulated to its richest investors to help them exploit the maximum benefits of the plutocratic future of the United Sates and the ever-increasing gap between the rich and the rest. These are startling documents that Citicorp has now gone to great lengths to take down everywhere they can find them on the Internet by legal action through their attorneys at Kirkpatrick Townsend because the documents are so candidly and brazenly aimed at ensuring that the rich get richer at the expense of the middle class. The documents point out that “non-rich” voters are becoming increasingly irrelevant but that open, democratic elections still represent a potential threat to the investment accounts of Citicorp’s’ clients. The documents warn: “Low-end developed market labor might not have much economic power, but it does have equal voting power with the rich.” Democracy is seen as the last single and most important threat to the rule of the richest one percent. So, the wealthiest minority began to assemble a coalition of rich investors and corporations with the goal of establishing a government that safeguarded their interests. So exactly how do you take over a government and create a tax plan to safeguard and protect “the one percenters”?
First, you ensure that you control the government. That “one percent controlling share” is exemplified first by President Trump, whose hackneyed political promises to “drain the swamp” began with his appointing a billionaire Cabinet that, once assembled, represents one third of all the wealth of the United States. It makes no bones about not representing minorities, subject matter expertise, or even the public interest. These steps were taken to ensure that at every turn the Executive branch of the government could be counted on to protect the interests of the wealthiest. Secondly, the Republican-led Congress needed to be brought to heel. Easy. Buy it. Congress has now become the recipient of more than $2.6 billion dollars’ worth of lobbying efforts by American corporations every year and the number keeps climbing. To put that amount of money into perspective, those lobbying monies now total more than all the money American taxpayers provide to fund the Senate ($860 million) and the House ($1.6 billion) combined. This is a vital part of the plutocratic strategy because it ensures that our representatives hear the “facts” laid out for them by lobbyists rather than non-partisan advisory groups and agencies. The last aspect of overhauling the government to meet the needs of the plutocracy is to ensure that their interests are well protected in the judicial branch. To this end, Congress ensured that President Obama was denied the ability and right of the Oval Office to name a Supreme Court Justice so that judicial decisions could not derail the plutocratic agenda. This was critical to ensure the continuity of a Supreme Court which gave us such fundamental decisions as 2010 Citizens United whose outcome gave corporations the right to donate as much money as they required to drown out the voices of the American citizenry and the 2014 McCuthceon versus Federal Elections Commission which struck down setting caps on what corporations or individuals could contribute per election cycle to political campaigns and political action committees.
So, the new tax plan put forth by the Republicans needs to be a bit disguised to sell it to the American public, but it also needs to be resolutely aimed at promoting the interests of the plutocracy., The plan has some pretty interesting features:
Those who make the lowest incomes in the US, i.e., less than $20,000 per year will see their tax rates rise from 10% to 12%
2. If you make $400,000 per year or more, your tax rates will go down.
3. Small businesses (which make up 95% of the businesses in US) would no longer be eligible for incorporating as pass-through corporations so they would will have to pay higher tax rates.
4. The large multinational corporations would see their rates drop from 39% to 20%.
5. The Individual Alternative Minimum Tax which affects households making more than $1 million per year would, however, maintain favorable tax rates for investments.
6. The repeal of deductions for state and local taxes will hurt blue states much more than red states because they have the highest taxes. This will also be a good way to punish them for not having gone for Trump in the 2016 election.
7. The estate tax would be repealed. This is a baby the plutocrats have been waiting for to get rid of taxes on the huge estates of the rich. Just this single exclusion will personally save Donald Trump more a half-billion dollars on his own estate that he can pass along to his heirs. Overall, the proposed tax plan saves Trump about $30 million dollars per year..
8. Finally, the tax plan calls for counting waived tuition and educational stipends given to doctoral students as direct income and taxing such scholarship funds as monies paid to the students who are pursuing their doctorates. It will effectively increase the tax rate on students (already drowning in debt) by 400 percent! This would have a direct impact on about 150,000 students across the country and penalize the very group that is trying to improve their education and enhance their careers to try to share in the American Dream. This is such a flagrant anti-educational feature of the Republican tax plan that one cannot help but wonder if the Republican Party—the proxies for the one percenters—is afraid that all those educated individuals with their doctoral degrees might end up being too liberal and more likely to vote for the Democrats so it would best if we could stop them from attending graduate school at all. Many experts in education have opined that such a radical change in the tax status of graduate students would effectively shut down the pursuit of PhDs in the United States except for the very wealthiest of students. Sarah Hernandez, the legislative director on behalf of the National Association of Graduate-Professional Students grimly summed up the impact of the proposed Republican Tax plan thus: “I monitor all legislation at the state and federal levels that could affect graduate and professional students, and this is just –this would have the greatest negative impact of anything I’ve seen…It would be devastating.”
Nor are such anti-educational policies in keeping with the words or spirit of the founding fathers of our country—to which the Republicans like to do such lip service. Thomas Jefferson was the framer of the Declaration of Independence and a staunch advocate of the democratic value and purpose of education. In a letter to George Wythe in 1786 Jefferson wrote: “I think by far the most important bill in our whole code is that for the diffusion of knowledge among the people. No other sure foundation can be devised for the preservation of freedom, and happiness.” In an earlier letter written in 1820 to William Jarvis, he made an even more pointed case for the democratic value of education: “I know no safe depositary of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutional power.” In an 1816 letter, Jefferson extolled the merits of education for all citizens of the new American Republic: “A system of general instruction, which shall reach every description of our citizens, from the richest to the poorest, as it was the earliest, so will it be the latest, of all the public concerns in which I shall permit myself to take an interest.” John Adams in his 1776 papers wrote: “Laws for the liberal education of youth, especially of the lower class of people, are so extremely wise and useful, that, to a humane and generous mind, no expense for this purpose would be thought extravagant.” He also wrote in his Collected Papers as the second President of the United States; “The whole people must take upon themselves the education of the whole people and be willing to bear the expenses of it. There should not be a district of one-mile square, without a school in it, not founded by a charitable individual, but maintained at the public expense of the people themselves.” So much for conservative values and securing the legacy our forefathers tried to leave to us.
Finally, the Republican Party declares itself to be so pro-business. Well, if they are, they have not considered the economic impact of taxing PhD students out of existence. Those individuals who have earned PhD degrees will see their salaries rise 25% higher that students who do not have a doctoral degree. Higher salaries and better jobs means more consumer dollars heading into the retail market place for goods and services. In the wider evaluation of the economic impact of individuals seeking and earning PhD degrees, knowledge, technical skills, and access to information are critical economic assets for every society and that PhD’s offer the greatest long-term benefit to safeguard our financial security and competitiveness on the global stage. Access to doctoral level experts and investigators is vital to any nation that wishes to endorse entrepreneurial undertakings. Despite President Trump’s assertions that factory manufacturing jobs have decreased because of trade agreements, they have not. According to the Center for Business and Economic Research, 85% of manufacturing jobs have been lost to improved technologies available elsewhere and automation. And guess who designs that technology and computer automation? You guessed it: PhDs. Another area where Mr. Trump’s misguided and uneducated views are apparent are in his insistence that he will bring back coal-mining jobs. The fact is that coal mining has suffered deep drops in production because natural gas and other fuels are cleaner and cheaper than coal. The Bureau of Labor statistics indicated that approximately 50,000 jobs are directly or indirectly involved in the coal industry. This compares to renewable sources of energy where, according to Fortune magazine, there are over 120,000 jobs and job growth is twelve times faster than the rest of the economy. Again, I would ask Mr. Trump and his fellow one-perecenters: “Where do you think those sources of renewable energy are going to come from?” Yes, PhD’s in engineering and math and the other sciences.
The tax plan put forth by the Republican Party is nothing more than a plutocratic insurance policy. It is yet another example of how far the Republican Party has fallen. How it has betrayed its own traditions as embodied by such presidents as Abraham Lincoln, Theodore Roosevelt, and Ronald Reagan. It has betrayed the values of our republic and its founding fathers. And it is selling out the American middle class and our children’s education for the benefit of the wealthiest one percent. Speaking of Abraham Lincoln, he believed that “a government of the people, by the people, and for the people shall not perish from the earth.” let’s pray he’s right and the one-percenters who have felt so emboldened by Mr. Trump and his billionaires’ club are wrong.
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