It Is A Terrible Bill - Congress Could And Should Have Done Much Better

The following are some thoughts by economist Paul Krugman on the bill passed by the GOP-controlled House, and how they could (and should) have dome much better.

The House has now passed what must surely be the worst piece of legislation in modern U.S. history. Millions of Americans are about to see crucial government support snatched away. A significant number will die prematurely due to lack of adequate medical care or nutrition. Yet all this suffering won’t come close to offsetting the giant hole in the budget created by huge tax cuts for the rich. . . .

What I thought I’d do today is talk about what might be happening now if the party controlling Congress and the White House consisted of decent people — not saints, but at least people who genuinely cared about the welfare of their constituents and the future of the nation.

One option, of course, would have been for Congress to do nothing. That, itself, would have been a big improvement on what actually went down.

But Congress could and should do more. . . .

What strikes me about where we are now, however, is that we could vastly improve our fiscal position with a series of easy choices — actions that would mainly spare the middle class and only hurt people most Americans probably believe deserve to feel a bit of pain. So here are four things we could and should be doing.

First, get Americans — mainly wealthy Americans — to pay the taxes they owe. The net tax gap — taxes Americans are legally obliged to pay but don’t — is simply huge, on the order of $600 billion a year. We can never get all of that money back, but giving the IRS enough resources to crack down on wealthy tax cheats would be both fiscally and morally responsible, since letting people get away with cheating on their taxes rewards bad behavior and makes law-abiding taxpayers look and feel like chumps.

Republicans are, of course, doing the opposite: They’re starving the IRS of resources and trying to make tax evasion great again. Why, it’s almost as if cheats and grifters are their sort of people.

Second, crack down on Medicare Advantage overpayments. Currently, much of Medicare is run through insurance companies whose payments from the government are based on the health status of their clients — the sicker the people they cover, and hence the higher their likely medical bills, the more the insurance companies receive. Unfortunately, insurers game the system, finding ways to make their clients look less healthy than they really are, and thereby get overpaid. . . .

Third, go after corporate tax avoidance. Much of this involves multinational firms using strategies that are shady and dishonest but legal to make profits actually earned in the United States disappear and reappear in low-tax nations like Ireland.

In 2017 Gabriel Zucman estimated that such maneuvers were costing the U.S. Treasury around $70 billion annually. The number is probably bigger now. . . .

Finally, we should just get rid of Donald Trump’s 2017 tax cut. That tax cut wasn’t a response to any economic needs, and there’s not a shred of evidence that it did the economy any good. All it did was transfer a lot of money to corporations and the wealthy. Let’s end those giveaways. . . .

I know, the usual suspects will come up with all kinds of reasons we can’t do obvious things to save money and increase revenue without hurting ordinary Americans. But politicians who aren’t even willing to do these things have no business lecturing anyone about fiscal responsibility.