Lawmakers on Capitol Hill approved massive tax cuts for the wealthiest Americans and corporations on Dec. 20. Rallies against the Republican legislation were held across the country, including a protest in front of the New York Stock Exchange in which hundreds of demonstrators participated.
According to an analysis by the Tax Policy Center, the final version of the “Tax Cuts and Jobs Act” gives the highest-earning 1 percent of households, those with incomes of at least $733,000, an average tax cut of $50,000. Those in the top .1 percentile, earning $3.4 million or more, will receive a $190,000 cut on average.
There are a number of other goodies embedded in the legislation that further favor the rich, including a provision that allows for a new deduction on income earned from real estate “pass-through” entities, such as limited liability corporations (LLCs). Fourteen Republican senators with investments in holding companies whose assets amount to a combined total of $105 million stand to personally benefit from the law, as does President Trump. His financial portfolio contains 560 such businesses.
Middle- and low-income households will see a modest break from the tax bill, but the benefits they receive will taper off over the next 10 years, with only cuts for high earners remaining.
By eliminating the Affordable Care Act’s health coverage mandate, the tax bill is expected to drive up premiums, forcing millions of poor- and middle-income Americans, unable to keep up with rising health-care costs, off of insurance rolls. They will thereby no longer receive tax breaks and subsidies provided to those with coverage. Four million Americans will no longer have health insurance by 2019, according to the Congressional Budget Office (CBO). Thirteen million will be without coverage within the next decade.
Over that timeframe, the CBO estimates that the tax cuts will add $1.4 trillion to the deficit, which advocates fear will be used to justify reductions to health, education, welfare and other forms of social spending. Additionally, the bill eliminates nearly all deductions for state and local taxes, shifting more of a burden on to taxpayers in states with robust public pensions and social programs. Republicans are betting that taxpayers will be less willing to support such spending if they are forced to front a larger portion of the costs.
Already, the unpaid-for tax cuts automatically trigger yearly reductions to Medicare, agriculture subsidies, student loans, affordable housing and other programs that begin at $114 billion and will mount to $150 billion by 2027. A total of $400 billion will be gutted from Medicare.
“The tax bill is part of a class war we are caught in with Wall Street corporations,” said Jim Perlstein, a retired professor and an organizer with the Professional Staff Congress, a union representing 27,000 current and former CUNY faculty and professional staff that helped organize the Dec. 19 rally in front of the Stock Exchange on Wall Street. “This bill is an assault on every part of life the union represents. It will devastate the public service sector we represent.”
Sherry Wolf, an organizer with the 8,000-member American Association of University Professors at Rutgers, commented on the irony of the bill’s passage during the Christmas season: “The rich have launched this attack on the public as a gift to themselves. They are relying on people paying the least amount of attention at this time of year.” The public, especially public-sector unions, must amp up their resistance, she said. “We are under siege and we ought not to stand in paralysis. They want to dismantle public institutions for their private benefit.”
Activists from the faculty unions staged a civil disobedience during the protest, blocking a gated passageway leading to the Stock Exchange building. After 20 minutes of warnings by the police to “willingly open the pedestrian walkway,” 15 protesters were arrested. The sit-in was largely symbolic, however, given that little stands in the way of the legislation.
The tax act will likely arrive on President Trump’s desk before Dec. 25 and defeating it could take a Christmas miracle, although he may delay signing the measure until January to suspend cuts to social spending until 2019, after next year’s Congressional elections. Nevertheless, in 2018, protesters plan to continue to lay the groundwork for unraveling the legislation in the streets and at the ballot box — a new year’s resolution they aim to keep.
An earlier version of this article, “15 Demonstrators Arrested on Wall St Protesting Tax Gift to the Rich” was published on Tuesday, Dec. 20. It has been updated to reflect new information.
Photo: Demonstrators engaging in a sit-in outside the New York Stock Exchange on Dec. 19. Credit: Erik McGregor.