Daniel S. Katz: How the GOP Tax Plan Will Damage Education

Daniel Katz reviews the many ways in which the tax plan now being debated and being pushed to an early vote without hearings will have deleterious effects on students in higher education and in K-12.

He writes:

“A great deal of ink has been spilled on how the Republican tax bill working through Congress would impact higher education for the worse. The highest profile item is the plan in the House bill to tax graduate student tuition waivers as income, effectively making the young people who are helping the nation move forward with critical research pay taxes on “incomes” that are tens of thousands of dollars higher than they actually get paid. However, higher education takes multiple hits in the House bill such as taxing endowment earnings that go towards school advancement, reducing incentives for charitable giving, and eliminating student loan interest deductions that benefited 12 million borrowers in 2014.

“For a bill that the G.O.P. is trying to market as a “boon” to the middle class, the House bill does not just tax graduate student tuition waivers, but also it takes aim at tuition benefits for higher education employees and their children. The New York Times portrayed a 64 year old night custodian at Boston College who managed to send all five of his children to college using such a benefit and who would never have been able to do so under the House bill. Assurances from House leaders that their bill would grant most Americans so much tax relief that they would not need those benefits ring hollow as analyses show that various provisions in the bills could result in $1.6 trillion dollars of tax INCREASES on middle class earners over the next decade.

“So while the House and Senate bills are not friendly to higher education (the Senate bill somewhat less so), there has been little talk about the potential impact on K-12 education if the Senate bill passes, is reconciled with the House bill, and sent to the Oval Office for splashy signing ceremony. There are several provisions in both pieces of legislation that would take serious aim at K-12 education at the state and local funding levels. Reporters and editorials have stressed that eliminating the deductions for state and local taxes (SALT) including property taxes, as in the Senate bill, will heavily impact Democratic leaning states with higher tax burdens, but the Governmental Finance Officers Association (GFOA) reports that eliminating SALT deductions from the tax code will have a broadly negative impact on tax payers in all states. According to the GFOA findings:

*30% of tax units use the SALT deduction.
*60% of deductions for earners under $50,000 a year come from property taxes and the loss of the deduction would negatively impact home ownership and price stability.
*30% of earners between $50,000 and $75,000 a year use the SALT deduction. 53% of earners between $75,000 and $100,000 a year use it.

“Income earners at all levels would see their taxes go up if the SALT deduction is eliminated.
More importantly from a public school perspective: the loss of the SALT deduction would apply significant pressure on states and municipalities to reduce taxes in order to offset the increases in federal taxes paid by their constituents. Using the 8th Congressional District in Texas north of Houston as a model, the GFOA estimates that the district would see an increase in federal taxes of $306 million dollars. Offsetting that with state and local tax decreases could impact $125 million in school funding. Simply put: education funding is an enormous local and state expenditure, and it would have to be cut in order to provide any relief to tax payers who lost SALT.”

This, it is wrong to assume that the removal of the SALT deduction would harm only blue states. As Katz shows, it will cut funding to most schools.

Read on to learn the many ways that education funding will be slashed because of this tax bill that fattens the bank accounts of the richest.

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Rexit Shakeup: Tom Cotton to CIA, Mike Pompeo to State

Not too long ago, reports surfaced that Secretary of State Rex Tillerson had nearly resigned at some point over the summer over quarrels with the president on our policies toward Qatar and Iran, among other things. It became known that Tillerson had referred to the president as “a moron,” which the secretary never denied. Naturally, all of that news was accompanied by rumors that Tillerson would soon quit or be forced out of his position.

Yet, there was some rather serious pushback against the idea that Tillerson would be fired. John Hudson of BuzzFeed News reported that any attempt to axe Tillerson would come at a heavy cost to the president due to a suicide pact:

In recent weeks, Tillerson’s top aides have expressed increasing exasperation over questions about the secretary’s fate. Their view is that, yes, Tillerson has been frustrated by the president’s tweets and fights over staffing decisions, but has no intention of leaving his job.

One US official expressed confidence in Tillerson’s status due to a so-called “suicide pact” forged between Defense Secretary James Mattis, Treasury Secretary Steven Mnuchin, and Tillerson, whereby all three cabinet secretaries vow to leave in the event that the president makes moves against one of them.

Maybe this suicide pact never existed. Or maybe it is no longer operative. There’s no mention of it in today’s breaking stories about Tillerson’s imminent demise.

According to the reports, Chief of Staff John Kelly has crafted a plan that would see Tillerson replaced at the State Department by CIA director Mike Pompeo. In turn, Pompeo would be replaced at Langley by Sen. Tom Cotton of Arkansas.

This is sure to unsettle the intelligence community and the foreign policy establishment. Pompeo is already seen as too political for the CIA, but he’s a lamb in that category compared to the combative Senator Cotton.

Perhaps this is why the news is being presented as John Kelly’s decision. The New York Times says Kelly “developed the transition plan” but it’s “not immediately clear whether Mr. Trump has given final approval” to it. The Washington Post says “the plan, hatched by White House chief of staff John F. Kelly, is expected to be set in motion over the next few weeks, and has broad support within Trump’s inner circle,” but likewise won’t say whether Trump has signed off.

Clearly the White House is floating this rather than simply announcing it, and they want Kelly’s imprimatur to help ward off the expected backlash. On one level, it’s clear that Tillerson is going to go soon, one way or the other. Opponents of Pompeo and Cotton can’t seriously think that they can fight these moves by keeping Tillerson in place. The suicide pact no longer makes sense given that Tillerson doesn’t want to stay much past the new year.

It’s also difficult to oppose a president when he wants to fill key positions with people he trusts, and Pompeo has already been confirmed once by the Senate while Cotton is a member of the Senate, so defeating their confirmations would be a major uphill climb.

Still, I can’t think of any responsible person on either side of the political divide who will welcome these moves, mainly because both men are so obviously ill-suited for the positions they’d be filling.

We’ll have to watch carefully for the backlash. Defense Secretary James Mattis has a lot of juice but he probably won’t wage a frontal assault. If he attempts to cut this off, it will be subtle and have some deniability. He may not fight it at all if he concludes it’s a battle he has no prospect of winning, but we’ll then have to see how that sits with him. Will he start looking for the exit, too?

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Republican Tax Plan Will Have Devastating Impact Across Society: Trickle-Down Economics Redux

The Republican Tax Plan will have devastating impact in many sectors of society, including education and healthcare. It will dramatically increase income inequality, by reducing taxes on the wealthiest and on corporations. The Republicans blithely assume that cutting corporate tax rates will lead to more job creation and economic growth, but past experience suggests that the bonuses for corporations will fatten profits for investors and have minimal impact on jobs.

“The tax plan has been marketed by President Trump and Republican leaders as a straightforward if enormous rebate for the masses, a $1.5 trillion package of cuts to spur hiring and economic growth. But as the bill has been rushed through Congress with scant debate, its far broader ramifications have come into focus, revealing a catchall legislative creation that could reshape major areas of American life, from education to health care.

“Some of this re-engineering is straight out of the traditional Republican playbook. Corporate taxes, along with those on wealthy Americans, would be slashed on the presumption that when people in penthouses get relief, the benefits flow down to basement tenements.

“Some measures are barely connected to the realm of taxation, such as the lifting of a 1954 ban on political activism by churches and the conferring of a new legal right for fetuses in the House bill — both on the wish list of the evangelical right.

“With a potentially far-reaching dimension, elements in both the House and Senate bills could constrain the ability of states and local governments to levy their own taxes, pressuring them to limit spending on health care, education, public transportation and social services. In their longstanding battle to shrink government, Republicans have found in the tax bill a vehicle to broaden the fight beyond Washington.

“The result is a behemoth piece of legislation that could widen American economic inequality while diminishing the power of local communities to marshal relief for vulnerable people — especially in high-tax states like California and New York, which, not coincidentally, tend to vote Democratic.

“All of this is taking shape at such extraordinary velocity, absent the usual analyses and hearings, that even the most savvy Washington lobbyist cannot be fully certain of the implications.

“Mr. Trump and the Republican leadership in Congress — stymied in their efforts to repeal Obamacare, and short of legislative achievements — have signaled absolute resolve to get a tax bill passed by the end of the year. As the sense has taken hold that Washington is now a trading floor where any deal is worth entertaining so long as it brings votes, interest groups have fixed on the tax bill as a unique opportunity to further their agendas.

“There’s a Christmas-tree aspect to the bill,” said C. Eugene Steuerle, a Treasury official during the Reagan administration and now a senior fellow at the Urban Institute. As an example, he cited the provisions in the House bill designed to appeal to the religious right…

“Economists and tax experts are overwhelmingly skeptical that the bills in the House and Senate can generate meaningful job growth and economic expansion. Many view the legislation not as a product of genuine deliberation, but as a transfer of wealth to corporations and affluent individuals — both generous purveyors of campaign contributions. By 2027, people making $40,000 to $50,000 would pay a combined $5.3 billion more in taxes, while the group earning $1 million or more would get a $5.8 billion cut, according to the Joint Committee on Taxation and the Congressional Budget Office.

“When you put all these pieces together, what you’re left with is we are squandering a giant sum of money,” said Edward D. Kleinbard, a former chief of staff at the Congressional Joint Committee on Taxation who teaches law at the University of Southern California. “It’s not aimed at growth. It is not aimed at the middle class. It is at every turn carefully engineered to deliver a kiss to the donor class.”

“In a recent University of Chicago survey of 38 prominent economists across the ideological spectrum, only one said the proposed tax cuts would yield substantial economic growth. Unanimously, the economists said the tax cuts would add to the long-term federal debt burden, now estimated at more than $20 trillion.”

The basic idea of trickle-down economics is that enriching those with the most will encourage them to invest in productive industries, create jobs, and thus help those at the bottom, as Money trickles down from the top.

The late Senator Daniel Patrick Moynihan described this as feeding the horses to feed the sparrows.

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The Anti-Republican Republicans

Vox’s Matthew Yglesias reminds us that during the campaign, Donald Trump pledged the following: “No tax cut for the rich, no cut to Medicaid, re-imposition of Glass-Steagall, new tariffs on foreign imports, end to carried interest loophole, universal health coverage.”

Of course, Trump has gone the other direction. He is not an economic nationalist. He is not a small-d democrat. He’s not even a populist. He’s a run-of-the-mill Republican on the lookout for a win.

But it bears repeating—again—that Trump’s con did not occur in a historical vacuum. The GOP has been plowing that soil for ages, but it did so in earnest after the election of the first black president. Some of those who benefited from that white backlash are still around, and they are about to inflict on us things they said they’d never do.

Just like the president.

If anyone bothered to go back and look at the stated principles embraced by “deficit hawks,” they’d find this golden nugget from the early days of the post-crash “revolution” in which “patriots” like Senator Rand Paul declared proudly that the Tea Party came to Washington because “real Americans” were “Taxed Enough Already.”

In a 2011 book about the Tea Party, Paul wrote:

The Tea Party began to gather forces from every direction, from Sarah Palin fans to supporters of former Arkansas governor and presidential candidate Mike Huckabee. They all came with one grievance foremost on their mind—the national debt.

Elsewhere in the book, he wrote:

Taxpayers are sick and tired of being the scapegoat for irresponsible spending by politicians. As the budget deficit mushroom, it’s Joe Taxpayer who gets stuck with the bill. Politicians campaign “Read my lips, no new taxes,” but reading between lips, we find that the politicians really meant “Yes, new taxes, many new taxes.” My distaste for the big government promoted by both parties—”read my lips, no new taxes” was George H.W. Bush’s broken promise—has never wavered.

Well, Paul has overcome his distaste. The Senate bill he favors squeaked through committee Tuesday. It will raise taxes on most people making under $75,000 a year, according to analysis by Congress’s own policy shop. It will eliminate a battery of income tax deductions in order to lower rates for corporations and the very rich.

Senate Republicans are pushing back against this analysis, and against public opinion opposing the bill, by saying tax cuts will spur growth and zero out the $1.5 trillion it would add to the $20 trillion national debt.

To the surprise of no one who has not drunk deeply from the well of misinformation, corporations are signaling the good times are about to get better. Bloomberg reported that they have no plans for investments that would create jobs and boost spending. They plan to further accommodate their already very comfortable shareholders.

But if we paid attention only to the laws Republicans hope to pass, we’d ignore half of what makes the current incarnation of the GOP so insufferable. The president gets all the attention when he attacks democratic process and norms, but we forget these unpopular Republicans are about to ram through an unpopular tax bill with almost no public airing, with almost no deliberation, which is the hallmark on any society worthy of the name “republic.”

Mitch McConnell vowed in 2014 that if the Republicans won control of the Senate, he would lead the way back to “regular order.”

 We are going to treat senators with respect — we are going to work harder and accomplish more. The Senate can be returned to the place of great debates, contentious debates, but where you can still get outcomes on things where you have at least 60 Senators.

Yeah, no.

Aside from must-pass spending bills, every piece of legislation that has come to the floor of the Senate has been voted on without the involvement, much less the input, of Democrats. This latest bill was designed to pass with a simple majority, thus setting the stage in the coming years for the Senate’s irrelevance as deliberative body.

The pattern is worse when it comes to the judiciary. McConnell has vaporized traditions, such as blue slips, to continue what can only be described as a rearguard action to place as many conservatives on the bench as possible before popular opinion, and electoral politics, overwhelms the Republican Party. McConnell surely knows the backlash that met President Obama will pale when compared in retrospect to the backlash that is awaiting President Trump.

The American people want “regular order,” and they are going to get it eventually, with or without the Republican Party.

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The Disgrace of East Ramapo, New York

The New York Civil Liberties Union recently filed a suit against East Ramapo, New York. The town school board has been almost completely captured by members of the Orthodox Jewish Community, whose children attend private religious schools. The school board uses its power to strip the budget for the students who attend public schools, who are overwhelmingly black and Hispanic.

Teacher Bianca Tanis, a member of the board of directors of New York State Allies for Public Education, here describes this shameful situation and calls on the Nee York State United Teachers to take action to protect the children of the East Ramapo District.

She writes:

“96% of public school students in the East Ramapo Central School District are Black and Latino while 98% of the students attending private schools are white with most attending private religious schools. Only one of the nine Board of Education seats is held by a public school parent. Needless to say, the Board of Education has NOT acted in the best interest of East Ramapo’s 8,500 public school students.

“The New York Civil Liberties union found that between 2009 and 2014 the East Ramapo Board of Education slashed funding to public schools and eliminated 200 teaching positions in addition to cutting numerous social workers and other key personnel.

“According the the NYCLU Executive Director Donna Lieberman, “The East Ramapo school district has effectively disenfranchised the Black and Latino community and allowed white residents to hijack the school board in service of the lily-white private schools. The East Ramapo school board has brazenly diverted taxpayer funds to bankroll white private schools and destabilize public schools. Their policies have compromised the education and well-being of thousands of Black and Latino children. The disenfranchisement and degradation must end.”

“What is happening in East Ramapo is tragic. I have seen it with my own eyes…

“The NYCLU lawsuit demands that the board stop holding elections until a “ward” system is adopted. This would introduce voting on the basis of geographic districts; there would be nine individual districts, with one member elected to the board from each district.”

This situation did not develop overnight. The Regents and the legislature have allowed it to fester, while the children of East Ramapo are cheated.

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A Repeat of the Southern Strategy, Minus the Dog Whistles

I wonder if anyone else noticed that the quote I used previously from Jonathan Swan about the White House meeting on infrastructure included this:

White House political director Bill Stepien said the group needed to consider the midterm elections when deciding when to finally make their big push. Some in the White House are skeptical that infrastructure will drive Republican voters to the polls.

What’s up with that? As I recall, Trump’s focus on infrastructure was one of his two great appeals that separated him from traditional Republicans, the other being his promise to re-negotiate trade deals. According to Steve Bannon, infrastructure investment was going to be the foundation for an entirely new political movement.

“Like [Andrew] Jackson’s populism, we’re going to build an entirely new political movement,” he says. “It’s everything related to jobs. The conservatives are going to go crazy. I’m the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Shipyards, ironworks, get them all jacked up. We’re just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement.”

Now there is concern about launching a plan because it won’t “drive Republican voters to the polls” in the 2018 midterm elections. That’s a pretty dramatic about-face.

As many people have suggested, it looks like Trump got a little spooked by the reaction of his base to things like his deal-making with Pelosi and Schumer on budget issues in September as well as his endorsement of Luther Strange in the Alabama Senate primary. Ever since then, he’s been stoking the issues that tend to rile up his base. Interestingly enough, they have nothing to do with trade and infrastructure and everything to do with race-baiting, Islamophobia, and standing firmly behind a child molester.

During a speech last night in Missouri to promote the Republican tax cut plan, Trump went public for the first time with what I suggested will likely be his next legislative agenda item.

But welfare reform, I see it, and I’ve talked to people. I know people that work three jobs and they live next to somebody who doesn’t work at all. And the person who is not working at all and has no intention of working at all is making more money and doing better than the person that’s working his and her ass off. And it’s not going to happen. Not going to happen.

Trump seems to know his base better than a lot of white liberal pundits. He recognizes that they are not likely to get fired up about an infrastructure plan or a re-negotiated trade deal. It is the politics of resentment that serves as the red meat that will drive them to the polls in 2018.

This is not a new strategy for Republicans. It is a replication of their Southern Strategy—minus the dog whistles. Over time, the party’s insurgents have added anti-immigrant and Islamophobic fears into the mix, as well as the other issues that inflame nostalgia voters. But basically it is the same toxic brew.

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Michael Lewis: Inside Trump’s Cruel Campaign Against Science at the U.S.D.A.

This is an outstanding article by Best-selling author Michael Lewis.

It will give you a scary insight into the Trump administration’s determination to stamp out any reference to climate change and to turn the basic functions of government over to the industries that are supposed to be regulated.

Here is a small snippet. The USDA staff waited to greet the transition team with briefing books.

“More than a month after the election, the Trump transition team finally appeared. But it wasn’t a team: it was just one guy, named Brian Klippenstein. He came from his job running an organization called Protect the Harvest. Protect the Harvest was founded by a Trump supporter, an Indiana oilman and rancher named Forrest Lucas. Its stated purpose was “to protect your right to hunt, fish, farm, eat meat, and own animals.” In practice it mainly demonized organizations, like the Humane Society, that sought to prevent people who owned animals from doing terrible things to them. They worried, apparently, that if people were forced to be kind to animals they might one day cease to eat them. “This is a weird group,” says Rachael Bale, who writes often about animal welfare for National Geographic.”

The man chosen as Secretary of Agriculture was Sonny Perdue, former governor of Georgia.

“One week after being sworn in, Sonny Perdue staged a public event at a school in Leesburg, Virginia. The Obama administration had pushed successfully to raise the nutritional requirements of school meals fed to 30 million American schoolchildren, for the first time in 20 years. To receive federal subsidies for the meals they serve, schools are now required to behave more like responsible parents than indifferent ones: more whole grains, more fruits and vegetables, less sodium, no artificially sweetened whole milk, etc. Concannon expanded the breakfast programs for kids who did not get fed at home—and that meal, too, became more nutritious. “You can’t just serve them pancakes and hot dogs,” he says.

“Big companies that provided the schools with meals fought back: it was more profitable for them to serve pancakes and hot dogs than fruits and vegetables. But by the end of 2016, America’s children were eating better than they had been in 2008. “Ninety-eight percent of the schools were meeting the new standards,” says Concannon, “and to those that weren’t, that had some problem, we’d say, ‘We’ll work with you!’”

“At the school in Leesburg, Perdue announced that the U.S.D.A. would no longer require schools to meet the whole-grain standard, or the new sodium standard, or ban fat in artificially sweetened milk. Those changes sound trivial, but the stakes are huge. This is a matter not just of what kind of milk America’s schoolchildren drink but also of the process by which we as a society decide which milk they will drink: will it be driven by the dairy industry and the snack-food industry, or by nutritionists?”

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