The recently signed $1.5 trillion Republican tax bill that hands permanent tax breaks to corporations and the wealthy like President Trump nearly failed because of Sen. Marco Rubio (R-Fla.).
At the end of the day, though, Rubio threw his support behind the bill after the Senate agreed to include in it the child tax credit (CTC) that would benefit lower-income families.
Now Rubio is echoing concerns Democrats and progressives have been arguing all along: the GOP tax bill will do too much to help America’s largest corporations.
The Florida senator told the Fort Myers News-Press:
“By and large, you’re going to see a lot of these multinationals buy back shares to drive up the price. Some of them will be forced, because they’re sitting on historic levels of cash, to pay out dividends to shareholders. That isn’t going to create dramatic economic growth.”
The bill that takes effect now in the new year triggers the most drastic changes to the American tax code in three decades.
Here are some of the most notable highlights:
- Beginning January 1, the top individual tax rate will now be 37% instead of its previous 39.6.
- The corporate tax rate falls to 21% from its current 35%.
- There is a 20% deduction for the first $315,000 of qualified business income for “pass through” entities–businesses not registered as corporations–such as law firms and doctors’ offices, worth $600 billion.
- Income above $315,000 phases in limits, ultimately culminating in an effective marginal tax rate of 29.6%.
- The previous 20% corporate alternative minimum tax, designed to prevent the wealthy and corporations from avoiding taxes entirely, is repealed.
- Those who make more than $1 million will enjoy a tax of cut $5.8 billion a year.
- Cuts will trigger PAYGO, a 2010 law requiring cuts to Medicare and other programs to offset deficit increases. This includes federal student loans, foster care subsidies, and Meals on Wheels funding.
- $25 billion will be cut from Medicare by 2018, $400 billion over the next decade.
- Gone is the estate tax worth $150 billion.
- Over $200 billion in cuts will be put toward a provision allowing a greater deduction for dividends on foreign earnings.
- Important state and local income tax deductions on which working Americans rely are eliminated.
- The individual mandate required under the Affordable Care Act (Obamacare) is repealed, leaving around 24 million Americans without healthcare and jacking up healthcare premiums.
- The “carried interest” loophole for private equity fund managers and some hedge fund managers remains.
- Oil companies will now be permitted to drill in Alaska’s Arctic national wildlife refuge (ANWR).
The hardest hit will be builders, small business owners, residents of higher-taxed states like California and New York, the working poor, and charities.
Public sector employees will watch their incomes decline, but corporations will be still be able to benefit from the same deductions they always have.
Rubio’s admission is conveniently timed.
What a patriot.
Image credit: msnbc.com
