The tax bill includes a 529 plan for K-12 tuition that will benefit the wealthy families who can put away $10,000 a year tax-free to save for private school.
This article explains how the plan works.
This is a giveaway to the families planning to send their babies to elite private schools.
Funny that someone thought this was worth spending federal money on, but not a cent (thus far) to save the Children’s Health Insurance Program (CHIP), which provides health insurance for millions of poor children.
Everything is a tradeoff.
Don’t be surprised a few years down the line when Republicans begin seeking massive cuts in social programs–Social Security and Medicare– to pay for the huge corporate tax cut that they will enact next week.
Diane Ravitch's blog 
Sickening and evil
LikeLike
They’re not going to wait for “a few years down the line” to take a hatchet to Social Security and Medicare. Ryan said “entitlement reform” is next on the agenda. For that guy, there’s nothing like cutting the livelihoods of seniors and the disabled to feed the greed of corporate America –who benefitted from his own father’s Social Security death benefits, but apparently no one else is deserving.
LikeLike
I am delighted that individuals will be able to save for their children’s K-12 education, similarly to how they can save for university/college. And the reduction in corporately-collected taxes, will spur the economy to greater growth. Everyone, whether opposed to the new tax plan or in favor, should look to the recent activity in the stock markets. The wealth-creators in the USA, are going to be un-shackled, and a new era of prosperity is on the way.
LikeLike
Charles,
Too bad about your Social Security.
LikeLike
Exactly.
Many of us are still waiting for the Reagan era tax cuts to trickle down as actual dollar bills, not small coins.
I recall how delighted the owners of the child care center where I worked at then were with Reagan because that meant they were able to travel abroad twice a year instead of just once. (They voted for him and were proud to say it.)
Meanwhile, my co-workers and I, who all had college degrees, continued to get a nickle or, if lucky, a dime pay raise every few years. And that was done primarily so the owners could be pleased with themselves and flaunt the fact that they paid ever so slightly above minimum wage. I heard them repeatedly say they paid higher than minimum wage to people, demonstrating they were proud of doing their bit for the cause.
That’s a typical practice at for-profit child care centers. For those of us in the trenches though, some low value coins were never enough to keep up with inflation in a city with a cost of living that has been dramatically increasing. Consequently, after many years of working under small-coin-trickle-down before being able to secure a decent paying job in my field (which occurred only because I returned to graduate school and got another degree), I now get Social Security retirement checks that are unlivable, so I can’t afford to stop working, despite my declining health.
This means I continue to pay Social Security and Medicare, including monthly premiums, which feels to me like the government is double dipping. Yet Paul Ryan and his cronies think I’m getting too much in return for my nearly 50 years of active duty in the workforce. They are sending the message that elders are of no value and don’t deserve to retire if we were not consistently high income workers in our careers, and it’s not a concern if we become homeless because they want us to just die quickly.
Idiots voted for these self-centered, uncaring low life politicians and their “f***ing moron” president. What a sick Ayn Rand society we are living in today.
LikeLike
Dear homelesseducator, well stated:
“Idiots voted for these self-centered, uncaring low life politicians and their “f***ing moron” president. What a sick Ayn Rand society we are living in today.”
LikeLike
What does the current tax proposal, have to do with Social Security? The funding for SS is in the remittances collected in the payroll tax, and the contributions, made by the employer. Spurring the economy to greater growth, and putting more Americans to work, (and paying the payroll taxes) will only benefit the fiduciary strength of SS.
LikeLike
Charles,
Paul Ryan and Mitch McConnell are passing a tax bill that adds $1.5 trillion TRILLION to the deficit. I promise you—and this is not my idea—that this gives them an urgent reason to seek cuts in entitlements, I.e. Social Security and Medicare. Probably the rightwing rags and FOX have not told you. But every reporter from the MSM has said this.
LikeLike
How much actual money does the SS have in its accounts to continue to pay benefits?
The answer to that question is the reason SS is at risk as long as the GOP controls the Congress, the Supreme Court and the White House.
Since its inception, the Congress borrowed all the money that flowed into SS and spent that fighting wars while cutting taxes and increasing the annual budget. The SS is owed that money that was borrowed by Congress and if the government defaults on that debt and goes bankrupt or refuses to fund SS to keep it going, then there will be no money to fund SS. It will collapse.
LikeLike
Ryan has already said that Medicare and Social Security are going to be next on the block due to lack of money. Apparently, you have missed this part of the plot to destroy the middle class and reward the donors who want something for all the money they have poured into US elections.
LikeLike
For the record: Social Security is not an entitlement. It is not the same as food stamps, nor medicare.
There are forecasts that this tax bill will increase deficits. There are forecasts that increased economic growth, will result in increased revenue for governments.
Someone once said “I wish all economists were one-armed. That way they could not say “On the other hand””.
LikeLike
Oh, I see, you are not entitled to Social Security, Charles.
Too bad.
I paid for it all my working life, and I now collect.
Be sure to let the Social Security Administration know that you opt out.
LikeLike
Why not just take both their arms, their feet, and their tongues? From what I’ve read about economics, it is a form of fortune telling and/or voodoo that is often wrong.
LikeLike
People act like Medicare is socialized medicine or free medical care, which is such a bad joke.
It’s a bit complicated but basically how it works is that you pay into Medicare in every paycheck that you earn, before and during retirement (as with Social Security). When you qualify to receive Medicare benefits at age 65, the government automatically deducts monthly premiums for Medicare from your monthly Social Security check. (Or optionally, you can obtain your own medical insurance.) You are also responsible for paying a deductible, and then Medicare pays only 80% of what they think you should be charged and you have to pay the remainder. Then you have to pay out of pocket for prescription medications or find a company which you pay monthly premiums to who will cover a portion of that.
To me, this is akin to how insurance companies function and it’s very far from being free medical coverage.
Of course, we pay into Social Security for as long as we work, too, so why lumping SS and Medicare together and calling them “entitlements” that are in need of “reform,” as if they are “welfare” and solely paid for by the government, is just dead wrong.
LikeLike
Here are recent quotes from Paul Ryan and Marco Rubio on these matters:
” “We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said in a radio interview last week. And, he said, “I think the President is understanding choice and competition works everywhere, especially in Medicare.” Last month, Sen. Marco Rubio (R-Fla.) said: “We have to do two things. We have to generate economic growth, which generates revenue, while reducing spending. That will mean instituting structural changes to Social Security and Medicare for the future.” ”
“Choice and competition” continue to be the rallying calls of those (in both parties) who promote neoliberal economic policies that value profits over people, policies that benefit business people most and which, with the deregulation they espouse, put consumers at risk. They consistently fail to appreciate how the gross inequitable distribution of wealth in this country is a result of capitalism gone wild, nor do they recognize that choice and competition do NOT, in fact, work everywhere, especially not in social programs, like schools and government safety nets for our country’s most vulnerable people.
And, as the author, Forbes contributor Bob Blancato, wrote, “Let’s also remember that words matter. Medicare and Social Security are not “entitlement” programs. They are earned benefit programs created for specific purposes.”
From “Why Big Medicare And Medicaid Cuts Are Likely” in Forbes: https://webcache.googleusercontent.com/search?q=cache:JdSAZRtJ6wsJ:https://www.forbes.com/sites/nextavenue/2017/12/12/why-big-medicare-and-medicaid-cuts-are-likely/+&cd=9&hl=en&ct=clnk&gl=us
LikeLike
“Let’s also remember that words matter. Medicare and Social Security are not “entitlement” programs. They are earned benefit programs created for specific purposes.”
From author’s penultimate in Forbes where you can see Ryan & Rubio quotes on entitlement reform:
https://webcache.googleusercontent.com/search?q=cache:JdSAZRtJ6wsJ:https://www.forbes.com/sites/nextavenue/2017/12/12/why-big-medicare-and-medicaid-cuts-are-likely/+&cd=9&hl=en&ct=clnk&gl=us Tried sending this before but I guess it was too long
LikeLike
OK, here are the quotes from paragraph 2:
““We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said in a radio interview last week. And, he said, “I think the President is understanding choice and competition works everywhere, especially in Medicare.” Last month, Sen. Marco Rubio (R-Fla.) said: “We have to do two things. We have to generate economic growth, which generates revenue, while reducing spending. That will mean instituting structural changes to Social Security and Medicare for the future.””
Need to get the word out to people that “choice and competition” do NOT work everywhere, especially not for social programs like schools nor safety nets for the most vulnerable. They are euphemisms for capitalism gone wild, segregation and having many more losers than winners.
LikeLike
Q Oh, I see, you are not entitled to Social Security, Charles.
Too bad.
I paid for it all my working life, and I now collect.
Be sure to let the Social Security Administration know that you opt out. END Q
I said no such thing. Be Fair. Social Security is not an “entitlement”, like AFDC, Food Stamps, etc. Social Security is an independent program, that is not included in the (main) federal budget. see
https://en.wikipedia.org/wiki/Social_Security_(United_States)
I have been paying into the SS program since 1968. As a participant, I am “entitled” to SS benefits, notwithstanding the fact that SS is not an “entitlement program”.
I have no plans to refuse the benefit payments, that I have been contributing to, for half a century.
LikeLike
Social Security is an entitlement, created during the New Deal to Protect all Americans from living in poverty when they grow old. It goes to ALL, not just the poor.
LikeLike
I agree that SS was created in the 1930s, to enable older people (and disabled, and survivors,etc) to have some financial security.
BUT- SS differs from programs like food stamps, section 8 housing, medicaid, AFDC, etc. in that the recipients of these programs, do NOT pay into a fund for them. The aforementioned, are operated by the feds, with general fund tax revenues.
SS is unique, in that the trust fund, is funded solely through the pyaroll taxes of workers, and the matching payments made by employers.
LikeLike
You may not know this,Charles, but the Koch’s, DeVoses, and other libertarians have tried for years to privatize Social Security and make it means tested, with the ultimate goal of eliminating it. After the Republicans get through with it, I hope you still can collect. Don’t count on it.
LikeLike
I am well-aware that there have been plans over the years, proposed to privatize or “partially-privatize” the SS system. There was a proposal during the G.W.Bush administration, to permit some individuals to opt-out.
The proposal was shot down, quickly. SS has been called the “third rail” because anyone who touches it, is in for a shock.
LikeLike
Not anymore, Charles. Ryan said that Social Security and Medicare need to be cut, and they are on his agenda. Sorry about your Social Security. I don’t need mine to survive, but I am fortunate. You may not be.
LikeLike
Charles
Somehow the stock market went from 6,443 in 2009 to 18800 in last November and it did not trickle down to workers . In fact, in that time wages stagnated and stagnated most for the lower and younger end of the wage scale .
But we have been here before I guess you don’t remember the Bush tax cuts . How did that work out . How did that work out for inequality .
How did that work out for those angry white voters . How did that work out for GDP growth . But have no fear that could have just been a one off . So whats the pattern . since 1980 .
Fridays Washington Post
https://www.washingtonpost.com/news/wonk/wp/2017/12/15/u-s-lawmakers-are-redistributing-income-from-the-poor-to-the-rich-according-to-massive-new-study/?utm_term=.fa6167d4d2aa
LikeLike
Thanks, you made the point better than I can. workers do not benefit.
LikeLike
The experiment of ‘trickle down’ didn’t work in Kansas and it won’t work in the US. It is a scam to bring money to the donators who successfully bribed members of Congress.
…………….
Duane Goossen: Can’t kick Kansas around anymore
…To be sure, much work remains to bring Kansas back to financial health. And while surveys show that a large majority of Kansans now believe our tax cuts were wrongheaded, not everyone owns up. Note, for example, our out-of-touch congressional delegation casting votes for the U.S. tax plan. Or the hometown, Koch-funded Kansas chapter of Americans for Prosperity spending $1 million to mail Kansans mega-numbers of postcards bashing legislators who successfully voted to reverse the Brownback tax plan.
Even so, our hard-won experience and newly-achieved turnaround allow us to offer lessons.
First, tax cuts don’t pay for themselves. The revenue loss from the Kansas tax cuts was steep, immediately throwing the state budget badly out of balance. The U.S. tax cut plan will add more than $1 trillion to the national debt and threaten Social Security and Medicare, just as the Kansas plan threatened public education and highways.
Second, tax cuts for the wealthy don’t trickle down. The Kansas plan primarily cut taxes for the wealthiest, while lower-income Kansans ended up paying more. Promised new jobs never arrived. Likewise, corporations and people with substantial “pass through” income benefit most from the national plan.
Finally, and more hopefully, rotten tax policy can be corrected by an engaged citizenry working together in a bipartisan way.
But alas, it looks like the U.S. will pay little heed to Kansas’ lessons. The die appears cast. Just don’t ever say one more derogatory thing about Kansas…
Read more here: http://www.kansas.com/opinion/opn-columns-blogs/article190114594.html#storylink=cpy
http://www.kansas.com/opinion/opn-columns-blogs/article190114594.html
LikeLike
This is a dangerous social experiment. A few years down the road we could end up back in 2008. Except this time we will have a financial meltdown. Or worse.
LikeLike
Big win for ed reform, though. They got the national vouchers they’ve been lobbying for.
They’ll immediately begin lobbying for an expansion, which it how this goes in every state they capture.
Ohio ed reformers use the same playbook- gut public school funding, expand private school subsidies.
They’re lobbying for a voucher expansion in Ohio right now. They can’t manage to put in a day’s work on the public schools 90% of the kids in this state attend down there in Columbus, but they find endless hours to promote their preferred private school system.
So much for the promise that vouchers were for low income children “trapped” in failing schools, huh? The public was told that for years. They were misled. Obviously.
LikeLike
I’ll ask it again because public school families should be asking it.
Can Betsy DeVos or anyone in the US Congress point to one thing they have accomplished this year to benefit any PUBLIC school student, anywhere?
It is ludicrous that thousands of public employees who supposedly work on “public education” do nothing for public schools. In fact, the sum total of their efforts this year will HARM kids in public schools.
Public school kids would have been better off if none of these people came to work this year. They subtract. A liability to public school families. Actively working against public school parents. And we have the privilege of paying them for it.
LikeLike
I think it’s time to start playing out scenarios for the end game here. Say ed reform gets what they want and we go to a 100% voucher system.
What we know from the current voucher systems they’re pushing all over the country is the vouchers don’t cover the (real) cost of tuition .
So if they succeed in a national voucher program that covers all children (ed reformers call this “the money follows the child”) and the vouchers don’t provide the level of support public school children currently enjoy- and they won’t- the fragmented privatized system will be more expensive than our current system, which enjoys economies of scale- then what?
I think I know what. Student loans for k- 12 education. They’ll provide a rock bottom voucher and families will have to come up with the rest. Enter the lenders, who will follow right behind “backpack vouchers”
This concept is already very popular in plans to privatize Medicare. They call it “premium support”. That’s a federal voucher to cover some of the cost of health insurance. They could do that for schools. They WILL do that for schools.
We won’t just lose public schools. We’ll lose the whole concept of a guarantee of a free k-12 public education and if you think our k-12 education is inequitable now, wait until parents have to borrow to supplement rock bottom vouchers.
LikeLike
It’s horrible to watch this happen because there’s a concept in health care policy that they call “fragmentation”. It’s part of the reason the US has such poor public health outcomes. We spend a ton on health care in the aggregate but our PUBLIC health outcomes are poor compared to other countries as a whole.
This is exactly what ed reformers are doing to public school systems. They’re taking our broken health care system and replicating that in k-12 education.
LikeLike
As a society we’ll regress to the social class structure of the Middle Ages. 90% of the people will be peasants with the corporate leaders being the highest class hence Rulers of the New Order. AI robots that they are actively creating will do their bidding. Peasants will have the mentality of Jack from Jack and the Beanstslk. Think ” Two in each hand and one in my mouth” to show the number five, because they will not receive an meaningful education.
LikeLike
It is a repeat of the Gilded Age. I hope this massive movement of wealth to the already wealthy stirs the ire of the working people so they understand the value of unions and authentic education.
LikeLike
Here’s a good rundown of what DC has accomplished on public education this year:
https://www.npr.org/sections/ed/2017/12/16/570787449/washington-did-a-lot-this-week-and-americas-schools-will-feel-it
Gutting public school funding, reducing college grants for low income students, and deregulating for-profit colleges.
The sum total of their work product for this year. The septuagenarians in Congress, all of whom received public support for their own educations, have decided to deny that to the generations that come after them.
They should have to pay back every dime they ever received from the public for their own education(s). We can put it in trust for the young people they’re robbing. Most of them are millionaires. They can afford it.
LikeLike
Are WE SKINKING into the DARK AGES? GOOD GAWD!
LikeLike
“Republicans begin seeking massive cuts in social programs–Social Security and Medicare”
The GOP is already doing it but the whiplash from their supporting voters tends to get them to back off a bit each time, but that doesn’t stop them. They just find sneakier ways to still achieve what their slave owners (the extreme right and nut-case libertarian billionaires) want them to do like not allowed a debate on bills and rushing a vote before anyone has a chance to even read the legislation, and when a Democrat is president blocking the nominations of judges that won’t do what the billionaire autocrats want them to do when bad legislation is passed and ends up in court.
LikeLike
One other thing is that most 529 plans don’t just sit there to get the tax benefit, the funds are invested in a range of stock market fund options. So this is not just rewarding upper middle class and wealthy people, it’s also directing all their money straight over to Wall Street.
How cool it must be to be a fund manager and get your fund on the 529 menu for affluent “captive” parents to invest their kids tuition money in.
The Times article notes that the menu of investment choices are “unsophisticated” with very few options for socially conscious investors. The money, of course is all at risk, unless you check the box to just park it.
But I worry always about the occasional market crashes, where “unsophisticated” investors lose billions, as we saw in 2008. In those cases, when markets are tanking and seconds count, it’s only the most wired-in, nimble traders that get their assets out in time, leaving the slow-moving institutional investors holding the bag.
Hopefully the market will not crash again anytime soon. But this will immediately begin a gradual move to more private schools.
LikeLike
New polling shows that only 30 percent of Americans approve of this bill. It will be a disaster for the Republicans. People are starting to wise up. Soon, they will kick the bums out. Always darkest before the dawn.
LikeLike
Bob Shepherd: “New polling shows that only 30 percent of Americans approve of this bill. It will be a disaster for the Republicans. People are starting to wise up. Soon, they will kick the bums out.”
You are more optimistic than I am. People dumb enough to vote Trump and Ryan are probably buying into the ‘trickle down’ wealth that we all will soon get.
I’ve read that a majority of people believe the biggest cuts will go to the wealthy. Will this knowledge be enough to make a difference at the polls? Many people getting a tiny amount of tax money back will be satisfied through the 2018 elections.
LikeLiked by 1 person
The individual tax cuts expire in eight years. The corporate tax cuts are permanent.
LikeLike
The corporate tax cuts are not guaranteed to last forever. If the GOP loses both Houses of Congress and the White House to progressive Democrats, that cut could end.
LikeLike
It’s always happened, throughout history, that the wealthiest pushed and pushed and pushed until, finally, their toy broke, and it was always a big surprise to them. These people never learn.
LikeLike
Their toys didn’t break. They lost their heads. History shows us that the ruling class that causes a civilization to collapse usually ends up dead (beheaded) — all of them and their families.
LikeLike
This stuff gets very, very ugly. The wealthy and what’s left of the comfortable middle class have no idea how desperate the poor and working class have become. A lot of people voted for Obama and then Trump because they wanted anything different from what they’ve seen. People are getting fed up, and they’re getting wiser. They can only be lied to so many times before even the densest of them start to get it.
LikeLike
The spoiled children who have all the toys always push and push and push until the toy breaks. And then it’s not pretty, and they are really, really surprised. I hope it doesn’t come to that. I suspect that the Republicans are in for a very rude awakening.
LikeLike
We have almost one year before voters can kick the GOP in the ass. The Republicans will do a lot of damage in that time especially if Trump leaves the White House and Pence takes over. Pence is a certified ALEC minion. He takes his orders from the Koch brothers.
LikeLike
The Triumph of the Oligarchs
By Robert Reich, Robert Reich’s Website
18 December 17
The Republican tax plan to be voted on this week is likely to pass…
By passing it, Republican donors will save billions – paying a lower top tax rate, doubling the amount their heirs can receive tax-free, and treating themselves as “pass-through” businesses able to deduct 20 percent of their income (effectively allowing Trump to cut his tax rate in half, if and when he pays taxes).
They’ll make billions more as their stock portfolios soar because corporate taxes are slashed.
The biggest winners by far will be American oligarchs such as the Koch brothers; Peter Thiel, the Silicon Valley investor; Sheldon Adelson, the Las Vegas casino magnate; Woody Johnson, owner of the New York Jets football team and heir to the Johnson & Johnson fortune; and Carl Icahn, the activist investor.
The oligarchs are the richest of the richest 1 percent. They’ve poured hundreds of millions into the GOP and Trump. About 40 percent of all contributions for the entire federal election came from the richest 0.01 percent of the American population.
The giant tax cut has been their core demand from the start. They also want to slash regulations, repeal the Affordable Care Act, and cut everything else government does except for defense – including Medicaid, Medicare, and Social Security.
In return, they have agreed to finance Trump and the GOP, and mount expensive public relations campaigns that magnify their lies.
Trump has fulfilled his end of the bargain. He’s blinded much of his white working-class base to the reality of what’s happening by means of his racist, xenophobic rants and policies…
“http://robertreich.org/post/168664472410”
LikeLike
529 plans can be funded by anyone not just the wealthy. The can funded by grandparents as well as parents. The dividends and capital gains are tax free if used for education
LikeLike
James Plonsey Quote: “The dividends and capital gains are tax free if used for education.” True. But the $10,000 limit means that it will primarily benefit the wealthy.
I mentioned in an earlier post that I worked for 20 years in Illinois. Most of those years were as a single parent teacher. My salary was so bad that I managed to save $50…ONE year. I’d put some money in the local credit union each month and then have to take it out bit by bit until there was nothing left. Each month I”d pull the same routine hoping desperately that this month would be one whereby I could save something. NOPE!
I read that the average middle class family has saved around $10,000 by age 50. This tax ‘benefit’ will not help the middle class very much. They simply don’t earn enough money after having had years of stagnant wages while investors and CEO’s rake in the money.
Maybe they can get some help from grandma and grandpa. My parents were poorer than me. Fortunately, I worked overseas and finally made a decent salary as an elementary band and classroom music teacher.
LikeLike