The Current Tax Bill & Income Inequality in the U.S.

The United States is a great place for billionaires — and it will especially be so today, after the latest tax bill has passed. Although the Children’s Health Insurance Program (CHIP) for low-income children is supposedly unaffordable, we apparently have plenty of money to give away to billionaires and “the political donor class,” according to a recent interview between Amy Goodman and David Cay Johnston on Democracy Now.

Why is this kind of inequality considered acceptable in the United States of America, where all people are supposedly created equal? Part of the reason for this kind of inequality is the disparity in tax funds and the ability to evade taxes in the first place. It almost seems like a sad joke, at this point, to point out the fact that corporations and high-income individuals don’t pay the same rate of taxes as most middle-income citizens.

Since, as Northeastern University writes, “The majority of the federal government’s revenue now comes from a tax on income,” a huge tax cut for the rich will do nothing to help our crumbling infrastructure and school districts — let alone the skyrocketing cost to rent or purchase a home. If government entities are unwilling to regulate the housing market, panhandling should not be criminalized. However, in some counties, panhandling is considered a misdemeanor and “a form of emotional and financial abuse.”

The continuing disparity between the haves and have-nots can also be seen in the difference between how white-collar criminals are treated and how police interact with individuals in urban areas during routine traffic stops. For example, if an interaction escalates and you are placed under arrest, you have the right to remain silent until you have received legal counsel.

Although getting arrested is not usually a primary concern for most of us, the issue of whether we can afford to pursue the American dream most certainly is. But why are fewer millennials buying homes than Baby boomers did at their age? Could it be the prohibitive cost of avocado toast and iPhones, or does the problem run deeper than that?

In fact, as Fiscal Tiger’s Nicolas Cesare observes, present-day wages just aren’t keeping up with the cost of buying a home. While housing prices continue to rise, millennials’ incomes simply aren’t keeping up with the price of inflation. Bleaker still, The Guardian reports that millennials simply aren’t buying homes — choosing to perpetually rent or cohabitate, dormitory-style, instead. Why? Most simply can’t afford the cost of a down payment where they live.

To return to the issue of the tax bill, although the Republicans managed to sneak in a repeal of the individual mandate that is part of the Affordable Care Act, they nixed the controversial graduate student tax increase that would have taxed graduate students as if they were making more money than they are. However, the fallout from the healthcare insurance mandate will likely translate into a hike in insurance rates due to decreased competition in the insurance marketplace — as well as a resulting deficit and future proposed cuts to Medicaid and Medicare funding.

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Yes, America is the land of the free and the home of the brave — provided you have the resources to make it on your own. If not, you’re out of luck. Just make sure you don’t find yourself in a situation where you can no longer afford to pay for medical insurance or housing expenses, because the safety net that once existed for these purposes may soon exist no longer.

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