By Karen Rubin, News & Photo Features
Money is power in America. He who has the gold makes the rules. These tenets have become even more manifest thanks to the politicized right-wing majority on the Supreme Court and its anti-democratic Citizens United decision which effectively equated cash with speech, therefore, he who has the most cash, has the most speech.
And the Republican tax scheme furthers this power grab.
Tax policy doesn’t just incentivize or discourage enterprises and where resources should be allocated, it is a declaration of priorities and moral values.
The Trump/Republican tax plan is designed to steal from the middle class to give to the already ridiculously rich (and powerful), exacerbating growing income inequality. But it does more: it redistributes wealth and resources and, ultimately political power, from Blue States to Red States.
Blue (donor) states including New York should fight back by holding federal tax revenues “in escrow” to pay for services which the Republican Congress intends to withhold.
This strategy was displayed in the failed Graham-Cassidy “healthcare” bill intended to repeal and replace the Affordable Care Act. Besides putting 32 million people into a state of medical and financial insecurity (a state in which they are more vulnerable and less politically powerful), it would have shifted Medicaid funding from states that had implemented Obamacare to those (Red States) which had not.
It would have cost New York $16.9 billion (the most of any state), with another $2.6 billion in federal cuts to the Disproportionate Share of Hospital (DSH) payment program. And Republicans failure to reauthorize CHIP (Children’s Health Insurance Program), which expired ironically on the day proclaimed by Trump as “Child Health Day,” cuts $1.1 billion, jeopardizing care to 330,000 New York children (over 9 million nationally).
Just these four major federal cuts, totaling more than $21.2 billion annually and undermining healthcare for 3 million New Yorkers, are disproportionate to the rest of the country.
That’s only the beginning: Republicans are aiming their biggest punch in their tax plan, which would pay for the $1 trillion shift in federal revenue to the already fabulously rich by eliminating the deductibility of state and local taxes. That falls hardest on New York and other Blue states which tend to have higher taxes because they also provide more services (health, education, infrastructure). This would cost New York State taxpayers $17.5 billion, the most of any state, and effectively double-tax 3.3 million New Yorkers, the vast majority middle class.
The intention is to bankrupt and rob states with Democratic/progressive/ liberal majorities any ability to transition to a clean energy economy, to provide education and health care, infrastructure and affordable housing – all that is anathema to Republican theology. It’s to engender residents’ anger at Democratic electeds (property taxes are a guaranteed rallying cry). In fact, it effectively tramples “states rights” by depriving states the resources to determine their own policies, the very thing that the Republican Freedom Caucus claims to favor. It’s to make living in blue states uneconomical compared to the red states which have low taxes but depend upon the federal government to make up the difference. Just as Republicans strive to “starve” the beast of Big Government, they intend to cut off any state’s ability to move forward with a progressive agenda.
But the Republican plan to pay for their redistribution of wealth and power to the already wealthy and powerful by eliminating the deductibility of state and local real estate taxes does something even more insidious: it puts the American Dream of home ownership –a bulwark for the middle class and upward mobility - out of reach.
Republicans realized after the 2008 Bush Great Recession that uprooting home ownership is part of their voter suppression strategy at play in the “Election Integrity” Commission headed by voter suppressionist Kris Kobach. They realize that people who own homes, who feel they have a stake in a community, are more likely to register and vote. If the only ones who can afford home ownership are the wealthiest (with a stake in preserving the status quo), the calculation is that will be a more secure voting bloc for Republicans. If you keep the young, the elderly, the new citizen, poor people of color unmoored and, in the case of young voters just making their way in the world, having to move often – for jobs, for rental housing – their right to vote will either go unexercised or challenged. They capitalize on the confusion state-by-state of how and where and when to register to vote, whether you have to keep changing your driver’s license and car insurance, etc. It becomes exhausting. And that’s what Republicans want, as they throw up whatever obstacles they can to prevent people from exercising their right to vote.
And it just may make living in a state uneconomical, so that workers are forced to go to those Southern states where wages are kept low but where there are few taxes (and few services).
“New York State is again hit hardest of any state by the federal tax plan's inclusion of this provision, according to data from the Tax Foundation,” Cuomo’s office stated. “Just five states - California, Illinois, New Jersey, Massachusetts, and New York - make up 50 percent of the revenues required to support the federal tax plan. The federal government's tax plan deliberately makes New York less competitive than other states to attract people and businesses.”
The Republican tax plan is politically strategic. And New York – which is the number one state contributor to the federal government, sending $48 billion more to Washington each year than is returned- and the other blue “donor” states should act: like a tenant with a legal challenge to a landlord, donor states should withhold the amount of funds that the Republican Congress is diverting and put it in an escrow account in order to provide necessary services to citizens.
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