What’s The Republican Tax Plan Endgame?
Absolutely nobody believes these draconian tax cuts are a good idea, so what the hell is the GOP thinking?
I love to pay taxes. I love that my taxes pay for parks and transit and services for neighbors who need help. I love paying for libraries and schools. I love the sense of ownership that my taxes provide when I think about Seattle and Washington state and the United States.
And it’s not just about participation in society. Taxes are an investment toward the inevitable day when I’ll need help. One day, there’ll be a crime, or a fire, or a disaster. One day, old age or sickness will make it impossible for me to earn a living. My taxes are a contribution to that rainy-day fund, an acknowledgement that I can’t do it alone.
But I have to be honest: I’ve experienced some moments when taxes have annoyed me, or when they’ve pinched a little harder than I’d like. This has probably happened to you, too. You likely recall a time when you go to buy a new phone or computer and the sales tax put an additional strain on an already-huge price tag. Or maybe your property tax bill came in higher than expected. Or perhaps some freelancing work resulted in a painful trip to H&R Block.
To take the thought experiment just a touch further: if you remember one of those moments when taxes took you by surprise, imagine what might have happened if you had immediate access to your elected officials. Imagine calling your mayor or your congressman directly to complain about the extra ten percent in sales tax you had to pay on top of the plumbing materials you just bought for your home DIY project.
If you had a direct phone line to your elected officials, you’d likely give them an earful about the taxes you just paid—telling them about all the other things you’d be able to do with the money you just shelled out, about how you’d be able to contribute more to the community than the wasteful services that benefit from your tax dollars, about how taxes are just theft. You’d really let them have it.
This is what it means to be a politician in America today: the wealthiest top one percent of all Americans and corporate interests have direct, immediate access to politicians. And they use that unfettered access to complain about all the money they think they could be making if they didn’t have to pay taxes or abide by regulations.
These wealthy Americans employ some very smart people to do their arguing for them, and those lobbyists and talking heads use the trickle-down narrative to explain why it’s smarter to cut taxes on the wealthy and leave the money where it is. The story goes that if wealthy people get to keep more of their cash, those benefits will trickle down to the masses in the form of more jobs and higher wages.
It’s not true, of course. Kansas even tried a mammoth tax-cut “experiment” and it ended in dramatic failure. Jobs were not created. The wealthy just kept that money. Growth stagnated. Eventually, Republicans had to vote to raise taxes in order to get things moving again.
But those lobbyists are tenacious, and they’re very good at being persuasive, so even though their arguments have been repeatedly disproven, they keep finding new ways to make those same arguments. For instance, as my coworker Nick Cassella points out, the claim that savings from lowered taxes will trickle down in the form of increased jobs has been replaced with the claim that cut taxes will trickle down in the form of raised wages. Neither is true, but the higher-wages claim is more relevant to a country with a low unemployment rate.
Still, I can understand the thinking behind the trickle-down narrative. Wealthy Americans want to keep more of their money, and they surround themselves with employees who work to help them keep that money and tell them that they deserve to keep that money. That motivation makes sense to me, even if it’s ridiculously short-sighted and painfully extractive. If the top one percent understood basic economics, they’d know that investing in a smart tax structure is the way to build sustainable growth for everyone. But they’re short-term thinkers who believe that they deserve their money more than the vast majority of Americans, and so they favor a reverse Robin-Hood plan that steals from the poor to pay the rich. It’s dumb, but it’s comprehensible.
The thing I don’t understand is this:
Why is the Republican tax bill so goddamned mean?
I’m serious. I can’t figure out why the Republican tax cuts are so completely merciless. It is a national shame that our schools are in such bad shape that teachers have to buy supplies for their students out of pocket. Be honest: it’s pretty heinous, right? Well, the Republican tax plan eliminates the $250 tax deduction that teachers used to be able to claim for those out-of-pocket purchases. To the teachers, that $250 is incredibly important, but in the scheme of the greater budget, this is peanuts. It’s nothing. It’s squeezing blood from a stone. But Speaker Paul Ryan and his cronies saw fit to slash it, and cruelty is the only motivation I can figure for this decision.
The plan also makes higher education more expensive for most Americans. It puts college and graduate school effectively out of the realm of possibility for the poorest Americans. It eliminates an important deduction for student loans. Benjamin Wermund writes for Politico that the house GOP plan would…
…tax as income tuition that schools now waive for graduate students working as teaching or research assistants. At some schools — where the tuition breaks run upwards of $40,000 — that could more than triple students’ taxable income, causing some to spend huge portions of their stipends, which are generally just around $25,000 to $30,000 a year, on massive tax bills.
This plan destroys the idea that poor Americans, if they work hard and play by the rules, can do better than their parents. By making higher education even more expensive, this plan stripmines the American Dream and sells it for scrap.
But it’s not just college students who’ll be mortally wounded by the tax plan. Nonprofits, too, will take a huge hit. They predict that the GOP incentives might mean Americans could give 12 to 13 billion dollars less in charitable donations every year.
And the list goes on. The plan would likely:
- Punish American families with two or more children.
- Cut the adoption tax credit.
- Create a serious penalty for Americans who have gotten divorced.
- Repeal a tax credit for businesses that hire veterans.
- And maybe most shockingly, it could “…prompt more than 13 million Americans to drop or lose their health care coverage by 2020.”
You might have noticed a pattern: some of these cuts are intended to hurt blue states more than red states. That’s true—the tax plan demonstrates our sports-team political mindset drawn out to its nastiest extremes, where one team sets out to defeat the other. But tax expert Michael Linden told the New Yorker that even if you’re in a red state, you’re not safe from the collateral damage: “There will be people who pay more in taxes in every state, in every district. The reddest state in the country, and the reddest district in that state, will have people who pay more in taxes,” Linden said.
So what the hell are Republicans thinking? This is a tax plan that defies nearly every value they’ve ever promoted as a party: it hugely adds to the national debt, it penalizes family values, it takes opportunity away from Americans who served their country in the military, it raises taxes on almost half of all Americans. What do they get out of it? What’s their motivation?
Bruce Bartlett—the former Republican strategist who helped create the idea of trickle-down economics decades ago before recanting in recent years—highlighted an especially cynical take in the New York Post yesterday. Bartlett believes that Republicans are willing to pass this vastly unpopular tax code into law now with the understanding that they’ll likely be rejected by voters in huge numbers in the midterms of 2018 and the presidential elections of 2020.
Bartlett argues that Republicans are thinking of a long game: they want to hand the wheels of power over to Democrats, so those Democrats can raise taxes, thereby making themselves toxic to voters for the next string of elections in 2022 and 2024.
It’s a breathtakingly stupid strategy, which almost makes it a believable strategy. This is a party that responded to the nation’s clearly shifting demographics by voting in the most openly racist presidential candidate since the Civil War, after all. But ultimately, I think Bartlett is overthinking it. No Republican politician in the party today is willing to do himself harm in pursuit of a greater strategic goal. They’re short-term thinkers, not chess masters.
Another theory is that we’re in a “dog who caught the car” moment—that Republicans have been the party of ‘no’ for so long that they don’t know what to do now that they have to say ‘yes’ to something. The implication here is that they’re just saying ‘yes’ to every single dumb idea any modern Republican has ever floated on tax cuts, hoping that they’ll all work together. It’s an appealing explanation, if just because it doesn’t assume that Paul Ryan is capable of fifth-dimensional chess.
But here’s my thought: maybe Ryan and Congressional Republicans are just trying to tear it all down? Maybe Republicans in power think Americans will like their country better if the social safety net withers away to nothing and no government program (aside from their own paychecks and a massive military budget) is properly funded? Or maybe they realize that it’s much harder to build something than it is to destroy it?
For forty years at least, Republicans have argued that we can’t have good government programs—health care for all, affordable college, solid infrastructure, decent elementary and high school education—because we just can’t afford it. Whenever they seize power, they hack taxes even deeper the next time they’re in office, and then they repeat the cycle all over again. They’ve adjusted our expectations to the point where mainstream Democrats have become willing participants in this grand hostage drama.
So perhaps the thinking is that if the GOP demolishes the castle, brick-by-brick, from the inside, the entire Democratic-built system (from the New Deal to the Great Society to Obamacare) will collapse? I’m sad to say that this is entirely possible; years of erosion has worn down our government’s systems to the point of fragility.
But if that’s the plan, I have bad news for Republicans: if they vote for these dramatic and painful tax cuts, they will have to face the consequences of their actions. Americans will see the results of trickle down economics—fewer jobs, lower wages, less compassion, more greed and extractive economic policies—and the choice will be stark.
Republicans are no longer painting themselves as a part of the government. They are against government, and they are against society. But people tend to like living in societies. Society keeps us safe and provides us with friends and neighbors who care for us. Society helps us all grow together, because we know we are vulnerable when we’re separated.
If Congressional Republicans force the choice between everything or nothing, between all for one or everyone for themselves, I believe the American people will choose to build, not to destroy. But it’s a great shame for this entire nation that it has come down to this moment, with one of our two political parties standing in the middle of the living room, soaking everything in gasoline, and lighting a match.
