Resistance Letter #33

November 12, 2017
Day 295 of 1461 days

Dear Co-defendants –


This letters is sent to about 200 recipients, all associated with Indivisible Cedar Mill (ICM) in some fashion. You can easily multiply that number by two or three, simple by posting it on to friends and relatives, particularly to those who live in red or purple states whose senators are not solidly Democratic. In turn, those recipients can send it to a few interested friends who are likely to take the Calls to Action as just that. Don’t be afraid to offend. Dare to disturb the universe!



The House taxscam bill has gone though committee hearings, if you can call them hearings. True to recent fashion, it was rushed though without giving the minority Democrats any opportunity to call witnesses at all, not one!  The hearings were a show, a charade, kabuki theater. The approved house tax bill now returns to the House for final approval. From there, it will go to a reconciliation conference to reconcile differences with whatever the Senate under Orrin Hatch passes through committee.

1.-Creating an acknowledged $1.4975 trillion ($1,497,500,000.00) deficit over ten years

2.-Capping all state and local taxes as deductions, so the income is taxed twice

3.-Eliminating child deduction credits, allegedly offset by increasing the personal deduction

4.-Decreasing and finally, by 2024, completely eliminating, the estate tax

5.-Reducing the 35% corporate tax rate, which is now really an effective 18-20% tax rate



The Senate released its own version of the monster last Thursday, and now it heads to committee under the gavel of Orrin Hatch. This committee under Orrin Hatch may be a duplicate of the House dumb show; we’ll see. Here are some major agreements and differences with the house bill:

1.- The deficit magically agrees on both bills – $1,4975 trillion dollars over ten years.

2.-Home mortgage interest is allowed up to $1,000,000 principal v House $500,000

3.-Does not kill estate tax, but doubles estate value for the taxation, from 5.5M to 11.1 for individuals.

4.-Raises pass through rates to an effective 30% v the House 17%

5.-Totally eliminates sales and local tax (SALT) deductions.

6.-Reduces corporate tax rate to 20%, but it does not become effective until 2019.

Under the Budget Reconciliation Act, the deficit cannot exceed a total of $1.25 trillion dollars and must not extend beyond ten years. The Senate version is critically close to violating these restrictions right now, and any further tinkering with tax deductions will only increase it beyond $1.5T.



How do the Republicans justify these large, rally large, deficits? They use the fiction of dynamic scoring. Dynamic scoring fantasizes that these tax cuts, given to corporations and wealthy individuals, will result in more corporate activity creating jobs and raising wages.  There is a bit of cognitive dissonance here since the plan overall is to basically eliminate all corporate taxes, old or new! This ruse was used to pass both the 1981 and the 2001 tax giveaways, and in both events failed to generate any of that fictional economic activity. The extra profits simply went to the bank, to stock repurchases or to increased dividends. In both 1981 and 2001, the deficit increased wildly. Still, that’s the hogwash that is being peddled to make those annual $150B deficits disappear.

Those deficits, when they occur, will be offset by decreased services. There are only three potential targets for cuts this size: Medicaid, Medicare and Social Security. The huge military budget is secure from cuts.

This proposed deficit is another way of eliminating health care for Americans. Be aware of this!



The violent drubbing that the Republicans received in Virginia will cause every Republican representative and senator to recalculate things, to review the situation. The dilemma they all face is trying to figure out how far they can distance themselves from Trump, and still not lose Trump supporters.  This ought to make things a little easier for us in opposing the senate version of taxscam. A decreasing number of them will want to fall on their sword for Donald J Trump.



American corporations have a statutory tax rate of 35%. This number is frequently cited as being the highest tax rate in the developing countries, and as hamstring American corporations, Both of these claims are blatantly false; they are simply prescribed talking points. All of us have heard of corporations paying no tax at all, and the majority of American corporations pay an effective rate of 18-20% after all deductions and loopholes. Simple arithmetic will tell you that with a statutory tax rate of 20%, most businesses will escape taxes completely. And that money will likely go to stock buybacks and increased dividends, not to enlarging the economy. Corporations have plenty of money on hand now to invest in American manufacturing should they want to. They don’t.

The complete elimination of SALT will hurt residents of all states, but those states with higher taxes will be disproportionately affected by it.  California, New York, New Jersey, Oregon, Minnesota, Iowa and DC are all high tax states, and you can note quickly that most of them are pretty blue and have Democratic senators. This is a calculated move by the Republicans, of course, but it will have to be reconciled in the committee, since this proposal alone will likely cause it to fail in the House. These six states alone have 110 seats in the House, and they will not accept complete elimination of SALT.



The highest priority calls now and in the future are aimed at defeating taxscam. Start off with calling Schumer, asking him to hold the Democratic coalition together. Call the other two senators, asking them to not break ranks on the taxscam. They have all been a bit wobbly. Use the deficit and elimination of SALT as your main arguments!

Senator Charles Schumer(NY) – 202-224-6542

Senator Joe Manchin(WV) 202-224-3954

Senator Heidi Heitkamp(ND) – 202-224-2043

The taxscam promises to increase the deficit and the national debt by $150 billion dollars a year for the next ten years. Budget hawks should be encouraged to oppose this huge increase in debt. These three senators need to be reminded what the taxscam would do to the budget and the deficit. They are previously, on the record, openly opposed to increasing deficits.

Senator Jeff Flake (AZ) – 202-224-4521

Senator Bob Corker(TN) – 202-224-3344

Senator John McCain (AZ) – 202-224-2235

In following weeks we will attack taxscam using Senators Paul, Collins, Murkowski, Lee, Cruz and Cotton on their particular issues with the legislation.



The meeting is set for Monday, November 13, at (email for location). Doors open at 6:30PM and the meeting starts promptly at 7:30 PM.  Refreshments,  both adult and juvenile will be provided along with a few tasty snacks. The speakers for this meeting are Ryan Deckert and Kathryn Harrington, both running for Washington County Chair. This is an important local position being vacated by Andy Dyck, current Washington County Commissioner. His replacement should be of great concern to all progressives in the county. Progressives occupying down ballot positions give us local control of things and provide a handy experienced bench for higher positions.

No Surrender.

L’audace, encore l’audace, et toujours l’audace!

Thank you.

John Fox