US Tax Reform | The Elites' Great Theft

Since last Friday, conservative Senator Joni Ernst has become the face of state-sponsored cruelty. At a town hall meeting, she was questioned about Medicaid cuts. When a heckler warned, "People are going to die because of this!" Ernst responded with almost unsurpassed arrogance, "Well, we all die eventually."

The senator is up for re-election in the state of Iowa in the fall of 2026. It will then become clear whether such statements will harm her. The fact that Republicans know how unpopular the law is is demonstrated by the fact that many of the cuts are not scheduled to take effect until two months after the midterm elections at the end of 2026. By then, at the very latest, the more than 200-year-old slogan from the French Revolution, "Peace to the huts! War to the palaces!" will be reversed by the palace dwellers. War is being declared on the huts – disguised as measures against supposedly rampant waste and abuse: "We won't touch anything. We just want no waste, no fraud, and no abuse," Trump said.

Meanwhile, the nonpartisan Congressional Budget Office (CBO) has projected that the law would result in a total of 11 million Americans losing their health insurance through various means by 2034. The actual number is even higher. However, some are likely to find private insurance elsewhere, such as through their workplace or the Affordable Care Act, better known as Obamacare , but at higher prices.

Even Republicans aren't claiming that there are 11 million Medicaid fraudsters. Rather, they expect that eligible recipients will also lose their benefits. For example, a work requirement for people between the ages of 19 and 64 is proposed to be enshrined in law for both food assistance and Medicaid. Anyone who doesn't work at least 80 hours a month, attend school, or participate in a training program faces a complete loss of social benefits. Parents of small children, pregnant women, and those with chronic illnesses are exempt.

The devastating impact of such requirements was experienced by citizens in Arkansas, the first state to introduce similar work requirements in 2018, until they were halted by a court order. More than 18,000 citizens lost their Medicaid coverage in just a few months because they didn't understand the work requirements, the state never informed them of the changes, or online registration portals were deliberately complicated, as studies later found. The argument of proponents that the requirement would encourage insured individuals to find work and eventually opt out of public insurance when their salary increased proved unfounded in Arkansas.

According to the CBO analysis, an estimated 8 million Medicaid recipients would lose their insurance due to the work requirement alone. The cuts are also likely to ultimately lead to hospitals going bankrupt, for example, because care costs would no longer be covered by insurance. "Hospitals that already operate on narrow margins cannot absorb such losses without reducing their services or closing their doors altogether," warned Bruce Siegel, CEO of the hospital advocacy group America's Essential Hospitals. The looming hospital demise would hit the Republican voter base hard, especially in rural areas.

"This isn't reform. This is simply theft."

Gabe Vasquez, Member of the U.S. House of Representatives

The Democrats, who have been in the minority at all levels of federal politics since last fall's election defeat, are forced to at least defend the already unpopular status quo, for which they share responsibility, having been in power for 12 of the last 16 years. The party has still not been able to agree on a major project—such as national health insurance for all. They have ignored the fact that the federal deficit is growing steadily due to rising social security benefits for the baby boomer generation . They have also ignored the problem that more than 40 million Americans don't have enough money to buy enough food.

Now, a quarter of them are at risk of losing even their last remaining food assistance, including four million children. As with Medicaid, states in the Snap program must decide how to deal with the loss of federal funding. Some may try to limit the number of participants, while others may end the program altogether.

This week, the Senate began working on the bill. There will certainly be minor changes, which the lower chamber will then have to vote on again. The Democrats cannot stop the plan. The Republicans can even afford three dissenters in the Senate. So far, there have been a few more, but that is not necessarily a good thing for the poorest in the country. After all, Senators like Rand Paul and Ron Johnson are arguing for even more cuts, as they reject an increase in the debt ceiling, without which the current draft cannot work; otherwise, the federal government would run out of money by August with all the tax cuts. The bill would "let the debt explode," Rand Paul raged. But he has nothing against the tax breaks for the rich or the cuts in food aid. He feels they do not go far enough.

President Trump has already spoken to Paul and Johnson on the phone to explore how he can accommodate them. He has also promised Josh Hawley that there will supposedly be "no cuts to Medicaid services," as the senator from Missouri reported. He fears the damage to his image if hospitals actually close. But that is precisely the path he has chosen, because almost $800 billion is to be saved from Medicaid. This can only be achieved if about eight percent fewer people are insured or if services are cut for everyone. Either way, hospitals' revenues will ultimately decrease.

Trump had already implemented the tax cuts during his first term in 2017. If Congress doesn't act, the relief will expire in September. One-third of the tax breaks, which are now set to become permanent, will go to the top five percent, who earn half a million dollars or more a year.

Those earning less than $35,000 will also receive relief under the new legislative package, as the abolition of taxes on tips and overtime is also planned. However, the bottom line is that this group will pay more due to cuts to Medicaid and food stamps, averaging $820 per year. In addition, the relief for the wealthy is intended to be permanent, while for low-income earners it will only last for four years—until the end of Trump's term.

In the future, inheritance tax will only apply to assets exceeding $30 million. According to the organization Americans for Tax Fairness, the government is giving away more than $200 billion in this way. As a reminder, food aid is also to be cut by $290 billion. The priorities could hardly be clearer.