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Opinion: Welcome to the new gilded age

— Corporations are people, my friend. And this is where they feed.

Room 1100 of the Longworth Building, with its ionic columns, gilt-fringed curtains and eagle-topped frieze, has for 80 years been the home of the tax-writing House Ways and Means Committee. But perhaps never before have corporations wielded their power as openly as they have here this week.

As the panel moves to approve the Republican tax plan, this is the room where it happens — where the rich will get richer, where everybody else will be forced to shoulder a greater share of the tax burden, and where a trillion dollars of tax breaks for corporations are being passed by lawmakers who work for these very corporations.

In one case, literally.

On Monday afternoon, as the committee began its markup of the tax bill, there on the top level of the dais, three seats from the chairman, munching from a bag of potato chips, was Rep. Patrick J. Tiberi, R-Ohio. Tiberi announced last month that he’s quitting Congress to lead the Ohio Business Roundtable, a group of “the CEOs of the state’s largest and most influential business enterprises.” Tiberi filed a notification with the House Ethics Committee that he was negotiating terms of employment with the group.

This isn’t illegal or against House rules. But a lawmaker drafting and passing legislation that benefits the people with whom he is negotiating the terms of his employment? That stinks.

It’s almost as bad as if, say, we had a commerce secretary who didn’t divulge that he had business ties to Vladimir Putin’s family. Or we had a president who, along with his family, used the federal government to further his personal business interests.

So it goes in this new gilded age. The $1.5 trillion tax cut has $1 trillion in corporate tax breaks. The idea was that the corporate tax rate could be lowered if you eliminated corporate tax loopholes. Now corporations will have the lower rates and the loopholes.

Individuals lose the ability to deduct state and local taxes, tax preparation, moving expenses and most medical expenses. But corporations — think of them as very important people with superhuman privileges — can still deduct these same expenses.

At Monday’s markup, Rep. Suzan DelBene, D-Wash., quizzed a tax expert on this corporate exceptionalism:

“Will a teacher in my district who buys pens, pencils and paper for his students be able to deduct these costs from his tax returns under this plan?” He will not.

“Will a corporation that buys pens, pencils and papers for its workers be able to deduct those costs from its tax returns?” It will.

“Will a firefighter in my district be able to deduct the state and local sales taxes that she pays from her tax return?” She will not.

“Will a corporation be able to deduct sales taxes on business purchases?” It will.

As the corporate welfare is doled out, the same bill widens the gap between the rich and everybody else. The liberal Institute on Taxation and Economic Policy concluded that the middle fifth of Americans would get a modest tax cut of $750 (1.4 percent of their income) in 2018, while the richest 1 percent would have a cut of $48,580 (2.4 percent of their income). Even the conservative-leaning Tax Foundation, using a more favorable methodology, acknowledges the plan would cost the federal government $989 billion over a decade.

Outnumbered Democrats can’t do anything but yammer. Rep. Mike Thompson, D-Calif., denounced the “wrongheaded, cruel, heartless” bill, which eliminates tax deductions that would have gone to those who lost their homes in fires. Rep. Ron Kind, D-Wis., has plans to introduce an amendment adding “fiscally conservative Republicans” to the endangered-species list.

Corporations have had their way with Washington before. In 2004, Rep. Billy Tauzin, R-La., caused an uproar when he quit Congress to become the top drug-industry lobbyist right after he helped to write and pass the Medicare prescription-drug expansion. He earned harsh denunciations as a symbol of Washington’s revolving door.

What’s different now is the reaction. Tiberi continues to help shepherd the corporate tax bill even after naming his corporate employer — and he is applauded. Five hours into Monday’s hearing, Democrats and Republicans alike on the panel gave Tiberi a standing ovation when he noted his upcoming retirement and thanked colleagues for their friendship. The panel’s top Democrat, Rep. Richard E. Neal, D-Mass., congratulated him on “your next endeavor.”

Good for Tiberi that he has admiring colleagues. If only those financing his next endeavor didn’t benefit so handsomely from his current one.

— Dana Milbank is a columnist for Washington Post Writers Group.

Comments

Ron Holzwarth

"Every country has the government it deserves." <br>
("Toute nation a le gouvernement qu’elle mérite.") <br>
- Joseph de Maistre, sometimes attributed to Alexis de Toqueville

2 weeks ago

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Bob Summers

Liberals will create any fantasy to take other peoples money.

It is what they do.

1 week, 6 days ago

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P Allen Macfarlane

So, basically you are calling the writer of this column a liar? Where is the hard proof? Or are you doing what you usually do, slinging mud.

1 week, 6 days ago

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Dorothy Hoyt-Reed

The Republicans have need a lot of deductions that actually allow people to pay fewer taxes, so many won't really get a tax cut; they will pay the same or more. On the other hand, corporations got a huge tax cut, but they also still have their deductions. So basically they will be able to lay off some accounting staff, since they won't have to work as hard to pay little or no taxes.

And I'm sure they will take all that savings and "create" more jobs, just like they did in Kansas. I mean look at all the businesses that rolled into our state when they didn't have to pay taxes. Look how much our revenues grew. I mean look at all the studies that were done to show how many jobs were created and how successful Brownback's experiment was. I'm sure they are out there somewhere. Surely, the guv wanted to show proof his experiment worked. /sarcasm, deep, deep sarcasm/

1 week, 6 days ago

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Gary Stussie

Highest Corporate taxes in the free world! Equating KS economy with US economy might not be fair comparison. See what your favorite MSM outlet says ...

(CNN) -- One can hardly read the news these days without learning that yet another American corporation has announced plans to invert, which is corporate-speak for restructuring as a foreign company to avoid U.S. taxes.

It's a trend that has increased exponentially over the past decade with barely a peep from Congress. Now that corporate giants such as Pfizer, Walgreen, Medtronic and Mylan have made bids to invert by merging with foreign companies and will be eligible to claim their headquarters are offshore to avoid U.S. taxes, Congress may finally act. ...

Even among corporations that aren't pursing inversions, shifting profits offshore to avoid U.S. taxes is a huge problem. For example, American corporations reported to the IRS that subsidiaries in Bermuda and the Cayman Islands collectively earned profits equal to 16 times the gross domestic product of those countries, according to recent data. It's clearly impossible for companies to earn profits in a country that are exponentially larger than that country's entire economy, further proving companies are using accounting gimmicks to avoid U.S. taxes."

1 week, 6 days ago

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