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The Trump Presidency
GOP Kleptocracy

Paul Krugman: The GOP Hates America's Children This Much Republicans would rather give heirs and heiresses a tax break than care for needy kids.

Burgess COMMENTARY

Peter Burgess

NEWS & POLITICS Paul Krugman: The GOP Hates America's Children This Much Republicans would rather give heirs and heiresses a tax break than care for needy kids. Photo Credit: YouTube Screengrab

More than two months ago, Congress let the Children's Health Insurance Program expire, and has offered no indication it will provide funding any time soon. Just last week, Sen. Orrin Hatch (R-UT) told Sen. Sherrod Brown (D-MA) on the Senate floor that, 'the reason CHIP's having trouble is that we don't have money anymore.' Two days later he voted in favor of a trillion-dollar tax cut for multinational corporations and the wealthy.

For the New York Times' Paul Krugman, this is just the latest salvo in a Republican war on children. In his Thursday column, he argues the GOP is further enriching its already fabulously wealthy donors at the expense of America's youth. Take CHIP, which provided health care to 8.9 million kids whose parents could not afford it last year. The estate tax would finance the program and then some—the former generates $20 billion in revenue while the latter costs taxpayers $15 billion—but Republicans would rather give a tax break to heirs and heiresses worth millions (or more).

'Are there any possible defenses for this choice?' Krugman asks. 'Republicans like to claim that tax cuts pay for themselves by spurring economic growth, but no serious economists agree—and that’s the case even for things like corporate tax cuts that might have some positive economic effect. Applied to inheritance taxes, this claim is beyond absurd: There is no plausible argument to the effect that letting wealthy heirs claim their inheritance tax-free will make the economy boom.'

The GOP's ridiculous argument that the estate tax hurts small businesses and family farms really demands no response, but Krugman provides one anyway. Just 80 ('eight-zero') such taxpayers would qualify at all. As for Chuck Grassley's claim that the country needs to reward those who invest rather than spend their money on 'booze or women or movies,' Krugman offers this rejoinder: 'Yes, indeed, letting the likes of Donald Trump Jr. inherit wealth tax-free is a reward for their fathers’ austere lifestyles.'

What Republicans will never acknowledge, despite a wealth of supporting economic data, is that increasing aid to poor kids ultimately saves the government money. The healthier children are and the more financial support they receive, the more likely they are to become productive members of society who pay their own taxes.

'But such results, while interesting and important, aren’t the main reason we should be providing children with health care and enough to eat,' Krugman is quick to clarify. 'Simple decency should be reason enough. And despite everything we’ve seen in U.S. politics, it’s still hard to believe that a whole political party would balk at doing the decent thing for millions of kids while rushing to further enrich a few thousand wealthy heirs.'

Read Paul Krugman's column at the New York Times. SEE BELOW

Jacob Sugarman is a managing editor at AlterNet.
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Opinion | OP-ED COLUMNIST

The Republican War on Children

Paul Krugman Paul Krugman DEC. 7, 2017

The health care of Alexander Gardner, 7, is covered by a federal program whose funding expired in September. Credit Mark Makela for The New York Times Let me ask you a question; take your time in answering it. Would you be willing to take health care away from a thousand children with the bad luck to have been born into low-income families so that you could give millions of extra dollars to just one wealthy heir?

You might think that this question is silly, hypothetical and has an obvious answer. But it’s not at all hypothetical, and the answer apparently isn’t obvious. For it’s a literal description of the choice Republicans in Congress seem to be making as you read this.

The Children’s Health Insurance Program, or CHIP, is basically a piece of Medicaid targeted on young Americans. It was introduced in 1997, with bipartisan support. Last year it covered 8.9 million kids. But its funding expired more than two months ago. Republicans keep saying they’ll restore the money, but they keep finding reasons not to do it; state governments, which administer the program, will soon have to start cutting children off.

What’s the problem? The other day Senator Orrin Hatch, asked about the program (which he helped create), once again insisted that it will be funded — but without saying when or how (and there don’t seem to be any signs of movement on the issue). And he further declared, “The reason CHIP’s having trouble is that we don’t have money anymore.” Then he voted for an immense tax cut.

And one piece of that immense tax cut is a big giveaway to inheritors of large estates. Under current law, a married couple’s estate pays no tax unless it’s worth more than $11 million, so that only a handful of estates — around 5,500, or less than 0.2 percent of the total number of deaths a year — owe any tax at all. The number of taxable estates is also, by the way, well under one one-thousandth of the number of children covered by CHIP.

But Republicans still consider this tax an unacceptable burden on the rich. The Senate bill would double the exemption to $22 million; the House bill would eliminate the estate tax entirely.

So now let’s talk dollars. CHIP covers a lot of children, but children’s health care is relatively cheap compared with care for older Americans. In fiscal 2016 the program cost only $15 billion, a tiny share of the federal budget. Meanwhile, under current law the estate tax is expected to bring in about $20 billion, more than enough to pay for CHIP.

As you see, then, my question wasn’t at all hypothetical. By their actions, Republicans are showing that they consider it more important to give extra millions to one already wealthy heir than to provide health care to a thousand children.

Are there any possible defenses for this choice? Republicans like to claim that tax cuts pay for themselves by spurring economic growth, but no serious economists agree — and that’s the case even for things like corporate tax cuts that might have some positive economic effect. Applied to inheritance taxes, this claim is beyond absurd: There is no plausible argument to the effect that letting wealthy heirs claim their inheritance tax-free will make the economy boom.

What about the argument that estate taxes are a burden on small businesses and family farms? That’s a total, thoroughly debunked myth: Each year only around 80 — eight-zero — small businesses and farms pay any estate tax at all. And when you hear about family farms broken up to pay estate tax, remember: Nobody has ever come up with a modern example.

Then there’s the argument of Senator Chuck Grassley that we need to eliminate estate taxes to reward those who don’t spend their money on “booze or women or movies.” Yes, indeed, letting the likes of Donald Trump Jr. inherit wealth tax-free is a reward for their fathers’ austere lifestyles.

Meanwhile, here’s the funny thing: While there is zero evidence that tax cuts pay for themselves, there’s considerable evidence that aiding lower-income children actually saves money in the long run.

Think about it. Children who get adequate care are more likely to be healthier and more productive when they become adults, which means that they’ll earn more and pay more in taxes. They’re also less likely to become disabled and need government support. One recent study estimated that the government in fact earns a return of between 2 and 7 percent on the money it spends insuring children.

By the way, broadly similar results have been found for the food stamp program: Ensuring adequate nutrition for the young means healthier, more productive adults, so that in the long run this aid costs taxpayers little or nothing.

But such results, while interesting and important, aren’t the main reason we should be providing children with health care and enough to eat. Simple decency should be reason enough. And despite everything we’ve seen in U.S. politics, it’s still hard to believe that a whole political party would balk at doing the decent thing for millions of kids while rushing to further enrich a few thousand wealthy heirs.

That is, however, exactly what’s happening. And it’s as bad, in its own way, as that same party’s embrace of a child molester because they expect him to vote for tax cuts.

Paul Krugman Macroeconomics, trade, health care, social policy and politics. Pessimism and Paralysis in the Aftermath of the Financial Crisis DEC 9 Facts Have a Well-Known Liberal Bias DEC 8 Republicans Are Coming for Your Benefits DEC 4 Republicans’ Tax Lies Show the Rot Spreads Wide and Runs Deep NOV 30 The Biggest Tax Scam in History NOV 27 See More » RECENT COMMENTS Marcel 9 hours ago Do Republicans demand right to life for children? Yes, but it ends once they're born. Not funding CHIP is a prime example. Prometheus 9 hours ago >They're just warming up. Once the GOP tax plan blowouts the deficit, they'll get the knives out and cut much more than child healthcare... Marika 18 hours ago Medicaid supposed to cover all the children and their parents. Are you talking about the illegal alien children? They should be taken care... SEE ALL COMMENTS ADVERTISEMENT Continue reading the main story

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