Should Democrats "repeal and replace" the Republicans' massive tax overhaul? A number of party strategists apparently think so. They're angling to make canceling Trump's biggest domestic achievement a central Democratic plank in the upcoming midterms and presidential election, just as Republicans did against President Obama's signature health-care law throughout his tenure. Jason Furman, head of the Council of Economic Advisors under Obama and one of the Trump administration's loudest liberal critics on economic issues, just explicitly called for a "repeal and replace" campaign.
This is a bad idea. After all, despite their years of yammering, the Republicans' plan to repeal and replace ObamaCare blew up in their faces last year. And that political disaster helps explain why it won't work for Democrats, either.
In a nutshell, the GOP push to "repeal and replace" ObamaCare failed because it was basically trying to take away things Americans actually liked: regulatory limits on health insurers, subsidies that help people buy private plans, and spending on Medicaid. These policies provided tens of millions of hard-pressed Americans with real help in their daily lives. Threatening those benefits in a fit of partisan fervor was an excellent way for the GOP to run headlong into a brick wall.
So would a similar disaster befall Democrats if they try to repeal and replace Trump's tax overhaul?
At first glance, you might say no. The Republican tax law's benefits are heavily tilted towards the wealthy, so repealing it would take away fewer things from everyone else.
But the GOP isn't dumb. They knew a bloated tax giveaway to the rich would go down easier with lots of other goodies thrown in. So they rigged the law so that in its first 10 years, the tax cuts will increase households' take-home pay across the income distribution. Those benefits for the poor and middle-class are modest, and will expire in 2027 thanks to the procedural gimmickry necessary to pass the thing. But if Democrats actually take back power — say in 2021, after an election that Trump loses, so his veto pen is no longer a consideration — and they try to repeal the law, they would end up effectively trying to raise taxes on the poor and middle class.
Even to contemplate doing so, they'd need a really good reason. And they simply don't have one.
As their justification for killing Trump's tax cut, Democrats are defaulting to platitudes about fiscal responsibility. "The tax cuts put the country on an unsustainable fiscal trajectory, with next year's deficit set to hit 5 percent of gross domestic product, a record outside of major wars and recessions or their aftermath," Furman wrote. This is daft.
No politician has ever been punished by voters for adding to the deficit. They have been punished for hiking taxes, starting stupid wars, and overseeing massive economic collapses. Voters respond when their lives become measurably better or worse, and when they can link that change to something politicians have done. If Democrats want to take away the GOP tax overhaul's limited benefits for the poor and middle class, they better have some amazing stuff to offer in exchange. A "more sustainable fiscal trajectory" does not qualify.
The Democrats do have fairly good ideas that could work instead. Their premier think tank just released a plan to expand Medicare coverage beyond retirees. It's not exactly Medicare for all, but it's a big step in that direction. Major Democratic politicians have proposed a national plan to give everyone paid family leave, and a massive expansion of the child tax credit (CTC). Furman himself suggested increasing the CTC or the earned income tax credit.
If Democrats "replace" Trump's tax cuts with some collection of those popular policies, that's great. But those ideas all require big spending, so Democrats would bring money in only to send it right back out again. By making such a fuss over fiscal responsibility, the left might throttle its own agenda.
That political risk might be worth it if the fiscal trajectory really was unsustainable and jobs and wages were on the line. But no one's really bothered to make this case. It's just been lazy knee-jerk talking points about higher inflation and interest rates.
If paid leave and a bigger child tax credit and more Medicare are good ideas, then why not just forget the GOP tax overhaul and make them the center of the Democratic agenda? Those are proposals voters can hear, and immediately understand how they'd make their lives better. Then hike taxes (or don't) to whatever degree is necessary depending on how the economy reacts.
"Repeal and replace" didn't work for the Republicans last year, and it won't work for Democrats in the future.