Taxing Berea College to enrich Donald Trump
Republicans are celebrating a tax overhaul in which Berea College pays to make President Donald Trump and other billionaires richer. If that’s not the perfect metaphor for Trump’s first major legislative victory, we don’t know what is.
Senate Majority Leader Mitch McConnell and Rep. Andy Barr are blaming Senate Democrats for Berea being subjected to a 1.4 percent tax on its endowment.
In truth, the historic Kentucky college, which provides tuition-free education to low-income students, got trampled by the Republicans’ rush to enact a plan on strictly party-line votes without public hearings or real vetting.
There’s no telling how many other collateral injuries and unintended glitches (not to mention hidden favors) have yet to be revealed. Under its self-imposed deadline, the Republican Congress spent less than two months debating the largest tax-code change since 1986. By contrast, the 1986 reforms grew from almost two years of discussion, extensive debate, many hearings and both parties’ input and support.
So stealthily were the last-minute touches added to this plan that Sen. Bob Corker, R-Tenn., defended his change of heart in favor of the bill by vowing that he didn’t know a provision that would directly benefit him had been inserted. That change, which protects income from real-estate shell companies, also benefits Trump and 13 other Republican senators, according to reporting by the International Business Times.
When a senator explains his vote by saying he didn’t know what was in the bill, suspicion is in order. Corker voted against the plan the first time it came through the Senate because he opposed increasing the debt.
While most taxpayers will see their taxes decline and take-home pay increase under the measure that Trump wanted before Christmas, the cuts are heavily weighted in favor of the wealthy and business interests. Republicans gave the middle class a bone to gnaw while serving up filet mignon to their donor class.
Congress’ own analysts project the tax cuts will do little to increase economic growth but will increase the deficit by $1.4 trillion. The plan does not simplify the tax code as Trump once promised, but it will deepen economic inequality.
After Corker changed his vote, the bill cleared the 100-member Senate 51-48 Tuesday night. Sen. John McCain, R-Ariz., under treatment for brain cancer, was absent. All the Kentuckians in Congress, except Rep. John Yarmuth, D-Louisville, voted in favor of the plan.
To help offset the cuts, the bill raises $1.8 billion over 10 years by taxing large endowments held by about 35 private colleges. A provision added late in the process shielded Berea from that tax. But the Senate parliamentarian ruled that provision violated Senate rules governing the process that allowed the bill to advance without the 60 votes usually required for major legislation. That rule violation and two others were raised on points of order by Sens. Bernie Sanders, I-Vt., and Ron Wyden, D-Ore.
On Wednesday, Barr, R-Lexington, said he had obtained an agreement to protect Berea College through other legislation. Before the House finalized the bill, Barr announced that House Ways and Means Chairman Kevin Brady has promised to enact permanent protection from the new tax for Berea.
Berea deserves that protection. The college, founded by slavery abolitionist John Fee, built a $1 billion endowment by wisely managing donations from people who wanted to support its mission of expanding opportunity and advancing equality — not worsen inequality, as the Republican tax plan does, by further enriching the 1 percent.
This story was originally published December 20, 2017 at 7:24 PM with the headline "Taxing Berea College to enrich Donald Trump."