Last week, the United States House of Representatives passed the Tax Cuts and Jobs Act which seeks to dramatically cut corporate taxes and consolidate benefits for individuals. In addition, the legislation eliminates the alternative minimum tax and estate tax as well as pare back certain individual deduction. This bill would also offer a new tax rate for owners of “pass through” businesses like LLCs and partnerships whose income from their businesses is taxed as personal income. It’s very clear that the House Republican tax bill will disproportionately benefit wealthy Americans, who’d more likely profit from corporate tax cuts more than non-wealthy Americans and likely exploit the pass-through rate by setting up dummy corporations. According to the Tax Policy Center, the absolute richest Americans such as the top 0.1% earning at least $5 million a year, would receive an average income tax cut of 3% which can translate into $320,640. The middle fifth of taxpayers earning between $54,700 to $93,200 a year would get a 0.5% income boost which will only consist of $360. Nearly half the cut will go to the 1%. Though 61.4% of Americans would receive a tax cut by 2027, 24.2% will see their taxes rise by an average of $2,080. Nevertheless, this bill will almost certainly not become law in its current form since the current version will certainly increase the budget deficit by trillions over 10 years and beyond. But it nevertheless, reflects the Republican Party’s values and priorities which don’t translate into the kind of tax reform America needs as well as disproportionately punishes hardworking Americans and the poor for no reason. Because this isn’t a tax reform bill with ordinary Americans in mind, but major Republican donors and corporations.

Who Wins:

Corporations– Since they’re the main focus on most of the tax cuts. According to the Joint Committee on Taxation, cutting the corporate tax rate from 35% to 20% (like this bill does), costs nearly $1.5 trillion over 10 years. They also gain new, more favorable treatment of income earned abroad, which either isn’t taxed or taxed at an even lower rate than 20%.

The Wealthy, Particularly the Ultrarich– Because they tend to earn a disproportionate share of their income from capital (like stock sales and dividends) and thus benefit from cuts to the corporate tax, which is largely a tax on capital. Should the corporate tax also reduce wages (as some conservative economists allege), corporate tax cuts still disproportionately help the wealthy as huge wage shares go to high earners, not low or median-wage earners. In addition, the pass-through cut could lead some wealthy people who either own pass-throughs or create new ones to shelter some of their income from high rates. Both Tax Policy Center analysis and the Joint Committee on Taxation confirm that the richest Americans will receive the biggest cuts as a percentage of their income.

People Making Mid-to High Six-Figure Incomes– They should arguably count as wealthy or rich, too. By raising the threshold for the 39.6% rate on individual income to $1 million for couples, up from $470,000 today, those with incomes in the $600,000 to $700,000 range will receive a sizeable reduction alongside to the low-end tax cut they get because the new 12% bracket will apply to income now taxed between 15% or 25%. The Tax Policy Center finds that once you reach the 95th percentile like earning $304,600 a year or more, over 70% of them get tax cuts in 2027, with the average change amounting to 1.4-3% of their income.

Pass-Through Companies– Companies like the Trump Organization get a new very low rate. Though the bill includes some provisions meant to prevent rich individuals from using this tax break to shelter income, it only limits the benefit in many cases. Overwhelmingly rich owners of these pass-throughs will still come out ahead. We know this because Kansas entirely eliminated state taxes on pass-through companies which mainly resulted in people to simply reclassify their income to dodge taxes while not actually starting any new businesses.

Heirs and Heiresses– Because this bill first reduces the estate tax (through increasing exemption and applying it to even smaller sliver of the ultrarich) and then eliminates it entirely. Keep in mind this is on those who earn at least $5 million anyway.

Who Loses:

Blue State Residents– Since they will pay higher taxes since this legislation eliminates state and local income/sales tax deductions while somewhat curtails those for property taxes. Wealthy people benefitting from these deductions will likely see this tax hike offset by the other tax cuts in the package. Though this may leave a silver lining when you realize that many blue states are home to Wall Street, Silicon Valley, major media organizations, Hollywood, many large corporations, and high earning Americans like Donald Trump.

The Housing Sector– Since it faces a new limit on mortgage interest deduction. Though the rate cuts largely make up for this in regards to some individual taxpayers, it reduces the incentive to build and buy homes, which could affect lenders, construction workers, real estate firms, etc.

Poor Families– Though they were rumored to receive a tax cut due to change in the refundability formula for the child tax credit, that measure didn’t make it in the bill. Because that credit only goes to families with $3,000 in earnings or more and phases in slowly. Though some in Congress did push to lower the threshold to $0, they didn’t succeed. Instead, the bill includes a provision denying the child tax credit to American citizen children whose parents are undocumented immigrants. Because Republicans don’t want undocumented immigrants having anchor babies to take advantage of that tax credit. Despite that fear of deportation keeps more undocumented immigrants from seeking benefits their citizen children could desperately use. Furthermore, fees extracted by tax preparers standing between the low-income and earned income tax credit aren’t deductible under this plan.

Higher Education– The House bill eliminates student loan tax exemptions and treats graduate tuition reimbursements as income. The Senate bill contains an excise tax on earnings of big university endowments. This will increase the cost of college for many students, result in more borrowers struggling to pay their loans, grad and doctoral students in terrible financial situations, as well as hit colleges and universities hard. Not to mention, such measures will dramatically hurt the economy in the long run by undermining human capital developments and creating a less educated workforce. In addition, it might even cost lives by impeding biomedical research.

Workers– The Republican tax plan treats union dues as taxable income. Poor and middle class people will also see their taxes increase across the board, especially if they earn between $40,000 and $75,000 a year. In addition, it taxes contributions to 401 (k) plans.

Healthcare– The House bill proposes eliminating medical deduction exemptions which will devastate many middle-class families with an illness. Republican Senators are proposing to repeal Obamacare’s individual mandate which will result in 13 million people uninsured, hurt enrollment in Medicaid and Obamacare exchanges, increase premiums on those who purchase insurance, and increase preventable deaths by 15,600 people per year. Not to mention, the Senate bill cuts alcohol taxes which are effective at reducing drink driving, violent crime, and liver cirrhosis while increasing them saves thousands of lives per year. Add to that cuts to Medicaid by $18 billion by 2021 and Obamacare subsidies. All this will only make the healthcare markets worse, not better.

The Deficit– As the Joint Committee on Taxation has reportedly determined that the House Republican tax bill will cost $1.51 trillion over 10 years, which is what the House/Senate allocated for the bill. But it’s still a sizeable increase in public debt.

As you can see, this Republican tax reform effort reflects the conservative allergic reaction to progressive taxation and goes beyond undoing the most progressive gains achieved during the Obama and Clinton administrations. 3 changes stand out in this legislation. First, these taxes are far more focused on owners than workers, even by Republican standards. Second, they take advantage of the ambiguity on what counts as income. Third, it weaponizes that vagueness to help their friends and hurt their enemies. Though to be fair, I’m not sure who counts as which in this scheme. After years of pushing for a safety net that works through the tax code and keep more social democratic forms at bay, Republicans now seem willing to even demolish even those modest protections, some of which benefit many of their voters. And they make it clear that a welfare state based on tax credits and refunds, rather than universal commitments, is all too vulnerable.

The House “reform” bill illustrates that Republicans understand how the economic game’s rules are shifting toward capital and away from labor (even from the rich’s labor). Since 2000, income growth among the 1% has accrued people making their money from owning money, stock, and other financial instruments, rather than to people making money via skills and labor. As a result, corporate profits have skyrocketed since then and increased faster during the Great Recession. However, such growth hasn’t trickled down to ordinary Americans. Wages have been flat since 2000 and recession recovery featured the weakest business investment of the postwar period. This marks a genuine shift in the economy’s organization which economists still struggle to understand. But the Republican tax plan supercharges these changes which are about benefiting not just the well-off, but those well-off because they own capital.

But why? Because the Republican tax plans mainly focus on corporate income tax reductions which will largely benefit concentrated owners of stock, passive owners of pass-through businesses who don’t actively work for the firm, and those inheriting their money. We should also understand that foreigners hold about a third of US-based stock, meaning there will be a significant amount of benefits not going to US citizens. In fact, the Institute of Tax and Economic Policy estimates that foreign investors would receive benefits roughly equal to those going to the bottom 3/5 of Americans.

Much of the Republican tax plan involves changing the definition of “income” in various ways. Now most people usually think of income as whatever their salary is. But it’s more complicated than that. And Republicans are redefining different kinds of income to benefit their friends as well as harming their enemies. Under the plan, Passive owners of pass-through entities get their income redefined in a way that minimizes taxation. Those inheriting money get their inheritance redefined to hide it from taxation. And those wanting to stuff money away to send their kiddies to private school, get that savings defined as non-income, too. All these are payouts to key Republican constituencies.

But Republicans are also defining income in other ways to punish their opponents. State and local tax deductions Republicans want to repeal primarily benefits those in blue states where those taxes are higher. They also want to treat graduate education tuition reimbursements as income, hitting higher education (which is home to climate scientists and the “politically correct” anti-right) hard. Union dues would suddenly become taxable income. And fees extracted by tax preparers who stand between low-income people and the earned income tax credit aren’t deductible under their plan.

Yet, it’s not just their opponents they want to punish either. House Republicans also propose eliminating all of the medical deduction exemption which would be devastating for middle class households with an illness. And the latest Senate tax bill calls for eliminating the individual mandate which could result in 13 million uninsured. In short, not only are Republicans are using the tax code to swipe at the Affordable Care Act, they also want to do away with their own tools for making medical expenses more bearable. In the past conservatives have explicitly stated that they hoped the growing use of tax-deferred 401(k) savings plans would weaken support and possibly replace Social Security. But today’s GOP almost reduced the cap for 401(k) contributions. What about the Adoption Tax Credit that was part of the 1994 Republican Contract with America? Well, the House tax plan got rid of that, too. And what about students investing in their own educations through student loans? The bill also puts student loan tax exemptions on the chopping block. Tax exemptions, deductions, and benefits are usually considered regressive, poorly targeted, and too reliant on the market. But they do form a coherent social insurance system for middle-class and upper-middle class families. Many of them number among Republican voters. Yet, it’s this very safety net via tax code that Republicans have declared war on in their new tax bill. They could’ve crafted these various deductions into a more coherent system, they’re axing them to cut taxes on the rich. Republicans are so indebted to capital owners that they’d destroy their system in order to appease them. Even if it means proposing a tax plan whose benefit are permanent for owners yet expire for everyone else. They’ve taken the worst trends in the American economy and hit the accelerator.

Let’s not kid ourselves. Trickle down economics has been implemented in US tax policy time and time again since the 1980s and has been shown not to work. When you cut taxes for the rich, you don’t create jobs nor raise wages. If anything, the rich just become richer while corporations make higher profits. Meanwhile, wages remain stagnant while ordinary Americans increasingly find themselves less able to adequately support themselves thank to inflation and rising costs of living. But according to free market purists, market competition should ensure low prices. Except that it doesn’t, especially if it results in large corporations expanding that they either become monopolies or conglomerates. Corporate increases in profits and size don’t translate into higher wages, more jobs, or lower prices. Nor will it benefit the economy or solve any of its problems. The Republican tax plan’s regressive nature is reason enough to oppose it. Should the United States run a deficit, then it shouldn’t be to reduce taxes paid by those at the top. Given recent economic developments, it’s especially irresponsible. Corporations are flush with cash thanks to large profits and aggressively low interest rates. But they’re not investing. Thus, these large tax cuts for corporations will have very little effect on the economy and only amplify the deleterious trends we’re still trying to comprehend.

I don’t doubt that the United States needs to reform its tax code. Wealthy Americans and corporations shouldn’t be the main beneficiaries in tax legislation. If anything, the rich should be made to pay more taxes as well as be held accountable for tax evasion and other financial shenanigans like everyone else. Should we need to eliminate deductions or benefits, let it be rich stuff like any measures pertaining to private jets. After all, if you could afford a private jet, you don’t need subsidies or tax breaks. In addition, we need to tax capital gains from which the wealthy primarily earn their money. The American people deserve better than an egregious tax scam that only benefits the few at the expense of the rest.