The tax legislation now in front of Congress needs a name. I propose the Johnny Rocco Tax Act, in honor of the classic amoral gangster of Key Largo fame.
The ultra-rich (the top 0.5% or so) want MORE, just like Johnny. Will they ever get enough? Just like Johnny, they never have.
How evil is this bill? First, its main target is children, especially children living with a single parent. The percentage of African-American [c. 60%] and Latino children [c. 40%] living with a single parent is far higher the percentage of white children in that situation [20-25%]. The bill combines the current standard deduction and the personal exemption (NO, it does NOT “double” the standard deduction, it combines two existing exemptions), so that a single mother with one child, who now exempts $14.4k of her income, will only be able to exempt $12k. If she has a second child, her loss will climb from $2.4k to $6.45k.
Given US demographics, this provision will mainly harm African-Americans and Latinos: in short, it’s racist. The provisions about student loan interest, which disproportionately affect African-Americans and Latinos, are similarly racist in application.
The loss of the state and local tax deduction (taken now by about one-fifth of taxpayers) will mean the real cost of those taxes will climb 25% for a middle class taxpayer. Stung by such costs, many will demand lower state and local taxes. At the same time, the Federal payments to states will drop (as explained in last week’s NY Times, among other places).
So, states will face lower revenue and political pressure to reduce taxes. How can they cut expenses? Here in VA, the state spends roughly half of its money on two things: education and Medicaid [1.3 million people]. Half of those on Medicaid are children.
At the other end of the scale, the 1% possess a greater share of US wealth (c. 40%) than at any time since 1929. Why do they need MORE money? Corporations like Apple brag about having the largest cash stockpile in world history. Why does Apple need MORE money?
The Johnny Rocco Tax Act seeks to rob poor children of their health care and education so that ultra-rich Baby Boomers, who already have more money than anyone could use, let alone need, can fill their coffers with $100 bills instead of those tacky $50s.
Quite apart from the economic stupidity of this legislation – and it is equally objectionable from the standpoint of capitalist economics – it is the most evil, immoral piece of domestic legislation to come before the Congress in living memory.