Tax Reform, Republican or Democratic, is a Godsend for the Swamp The Republican plan – whatever it ends up being – will feed the Swamp.

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Nov 13, 2017 No Comments ›› admin

By Lynn Woolley

The current Republican-backed plan to “reform” taxes is a fiasco. The Democrats are absolutely right that some wealthy people would get tax cuts – and that the plan might explode the national debt.

President Trump shows off a newly unveiled Republican tax plan meeting with House Republican leaders & members of the House Ways and Means Committee, November 2, 2017. Carlos Barria | Reuters

Republicans are right that Americans need a tax cut – and that no one should have to spend time and money on tax compliance. They’re both right – and both are pitifully wrong.

The only real tax reform would be if the Congress butted out – and treated everyone the same. That is to say that if the rate is 15 percent – then we should all pay 15 percent. If it’s higher, we all pay that rate as well. The only way to make deductions fair – is to abolish ALL of them. But Congress isn’t doing that – nor will it ever. Congress derives most of its power by selling favors based on the Income Tax Code. Lobbyists in the Swamp make millions obtaining those favors for clients.

Why I am against the Republican tax plan

Speaker of the House Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky., meet with reporters to announce the Republicans’ proposed rewrite of the tax code for individuals and corporations, at the Capitol in Washington, Wednesday, Sept. 27, 2017. (AP Photo/J. Scott Applewhite)

The Republicans’ hearts may be in the right place, and their plan, when it finally comes together, may be better than nothing. No one knows until we do it. Some of us will be better off and some of us will get hit with more taxes. There is only one thing we know for sure: the K Street lobbyists will fall all over themselves trying to make sure their clients’ carve-out is preserved.

The best example is the deduction for home mortgage interest.

Jerry Howard is the CEO of the National Association of Home Builders and he’s firmly against the GOP’s bill. In an interview with Marketplace’s Kai Ryssdal, Howard explains about his group’s lobbying efforts:

The framework when it came out talked about leaving the mortgage interest deduction alone and not touching it. And as a practical matter, by doubling the standard deduction you are reducing significantly the number of taxpayers that would take the mortgage interest deduction, leaving the mortgage interest deduction only for the super wealthy. And we felt that a concept that we had been working on internally, of a tax credit for all homeowners, would go much more significantly to the middle class. So we approached Chairman Brady with that concept. We spent the better part of three or four months working very closely with his team on that. We were under the impression that it would be put in the document, only to receive phone calls on Friday and Saturday saying that it wouldn’t happen.

From the NAHB website: Gerald M. Howard, CEO, has more than 25 years of lobbying experience in Washington, D.C.

Lobbying Congress is constitutionally protected, so it’s fine if the NAHB wants to tell members what it, as a group, thinks. But you can see from this excerpt that the group is actually crafting legislation – all with the idea of preserving what it wants in the Tax Code.

It’s certainly not limited to any one lobbying organization, or “strategy” firm on K Street. Right now, there is a frenzy going on in Washington to make sure that certain parts of the Code – which lobbyists were paid fortunes to get in there – stays in there.

The entire process is corrupt.

Members of Congress may not take outright bribes, but they fundraise. And fundraise. And fundraise. And when they get contributions, they know that they have sold a little part of their souls. Democrats do it. Republicans do it. Democrats and Republicans – and the lobbyists on K Street are all part of the Swamp. That is why they all hate President Trump and his former aide Steve Bannon. Bannon is the primary force in America today in opposing the Swamp.

Video” Former Senator Trent Lott gives a speech on lobbying

Tax “simplification” makes the Swamp extremely happy – and wealthy.

I was a young reporter when President Jimmy carter tried to simply the Tax Code. I learned that “tax simplification” simply adds pages to the already ginormous Code. It’s a paradox – but tax simplification makes incomes taxes more complicated.

This works for CPAs, tax preparation companies, tax lawyers and the Swamp. The more complicated it becomes, the more powerful Congress is and the more campaign contributions members get. The more Congress has to be bought off with contributions (or football tickets or junkets or women, or whatever is made legal BY CONGRESS), the more money the lobbyist make.

This is why powerful members of Congress like former Senator Trent Lott retire from Congress once they are eligible for taxpayer-funded retirement, and move into the lobbying business.

Video: Spreading the BS: Superlobbyist Trent Lott Won’t Say How Much He’s Paid To Lobby For Scam Schools

Being in Congress is highly profitable. But being a powerful lobbyist like Lott or the Podesta brothers is even more profitable. All of this is made possible by the billions of taxpayer dollars we send in each year.

You simply cannot mix the kind of power that Congress has with the amount of money the government brings in – without corruption. 

Video: How to bribe Congress from Jack Abramoff — on Russian TV, no less

That’s how the Swamp was born. Power + money = corruption. And these people in Congress make their own rules. That’s why they enter Congress somewhat rich and leave very rich. And if they move into lobbying, make that very, very rich. Some even get rich on the appearance of raising money for charitable works. Read: the Clintons.

There are two ways to Drain the Swamp with regard to the Tax Code. 

• Go to a fixed flat tax with no deductions and set the rate where it needs to be to keep the country in business.
Enact the Fair Tax, a well-thought-out consumption tax that is naturally progressive and takes care of the poor.

Neither one of these ideas has a chance because either would curtail the power on Congress and would virtually kill the K Steet lobbyists. The Republican plan – whatever it ends up being – will feed the Swamp. The symbiotic relationship between Congress and K Street will flourish. No matter what happens, our heavily lobbied Congress will never do the one thing necessary to make a tax reduction work – a drastic reduction of government spending.

There will be no spending reduction so long as lobbyists are running the Congress and the Congress is running the country. There will be no flat tax. There will be no Fair Tax. So this crappy Republican plan is probably the best we can hope for. How sad that is.

lynn@BeLogical.com

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