Why Trump will win on taxes
Here comes Trump's first legislative victory: Massive tax cuts for rich people
As long as Republicans control Congress and the presidency, there's always a chance that they could still pass some form of TrumpCare. But for now, after a string of humiliating failures, every Republican of consequence except President Trump seems to have thrown in the towel and moved on.
So what's up next? Tax "reform" — most likely meaning big cuts heavily skewed toward the very rich. And this time, chances are good that Republicans will get what they want.
Why? Because nobody will be immediately and directly hurt by slashing tax rates for the rich. Republicans can just follow the George W. Bush formula: Pass the cuts, yodeling to the hills and back about how they'll pay for themselves with supercharged growth (or some such nonsense), and pay for it by borrowing.
There are some procedural semantics to sort out first. As David Dayen explains, Republicans have a choice to make regarding the arcana of Senate procedure. They only have 52 votes (which they already have trouble corralling), and so need either at least eight Democratic votes to overcome a filibuster, or to use "reconciliation" procedures to sidestep the requirement for a 60-vote supermajority and instead pass legislation with just 51 votes. If it's the latter route, Republicans will use a placeholder budget bill containing reconciliation instructions as a vehicle to later be filled in with budget-related material (subject to about a billion complicated rules).
At the beginning of the 2017 session, Republicans set up reconciliation instructions that queued up a health-care vote. The idea was to bash that through, and then use the 2018 reconciliation to get to tax cuts. But with TrumpCare seemingly dead in the water, there's a lot of pressure to scrap the health-care push, pass the budget, and then queue up another round of reconciliation to get to taxes.
At any rate, there are two ways to get tax reform. Either Republicans can try to build a bipartisan coalition around closing some loopholes but lowering rates (long the fetish object of Washington centrists), which would obviously sidestep the filibuster, or they can try a party-line vote with a fresh reconciliation bill — meaning huge tax cuts for the rich.
If they choose the second option, they'll have two enormous advantages. First, there will be a tidal wave of propaganda supporting the bill — especially from the corporate sector, which was mainly either neutral or opposed to TrumpCare. Business elites were none too excited about throwing tens of millions of people off their insurance, but they'll be chomping at the bit to see if they can't break the previous record for corporate profits' share of economic output.
Second, there won't be nearly as much opposition. TrumpCare meant facing literal death for many people — it's part of why disability activists staged so many sit-ins in congressional offices around the country. That fervent activism from ADAPT and other groups — which produced much shocking footage of cops handcuffing and dragging off ailing, wheelchair-bound American citizens — was a huge part of the reason why TrumpCare failed over and over again.
But there will be no such immediate negative consequences for tax cuts, at least in the short term.
Don't get me wrong. Tax cuts for the rich would be a huge upward transfer of wealth; the rich would get even more money they don't need. It would be a moral obscenity, and probably lead to serious economic problems down the road. The Tax Policy Center estimated that President Trump's similar proposal from the campaign would cost more than $6 trillion over a decade. But nobody will be immediately unplugged from their ventilator. Opposition will no doubt be strong, but not so desperate or furious as that against TrumpCare.
Remember, the so-called "skinny repeal" version of TrumpCare was one of the worst pieces of domestic legislation in history, and it failed by just one single vote in the Senate. Trump's (thus far one-page) tax plan, by contrast, would merely slash taxes for corporations from 35 to 15 percent, reduce the top marginal rate from 39.5 to 35 percent, cut some investment taxes, abolish the estate tax, and open a huge loophole for rich people to recategorize their income as coming from a corporation and thus pay 15 percent. (In a staggering coincidence, all these proposals would also benefit Trump and his family enormously.) It ought to be quite simple to round up a House majority and 50 Senate votes for that — heck, Sen. Joe Manchin (D-W.Va.) will probably vote for it.
So if and when Trump does get his way on taxes, let us just remember the absolute lunacy of the last eight years of Democratic Party fretting over the budget deficit. For the second half of his tenure, President Obama boasted constantly about how he had cut the deficit — at the cost of terrific economic damage. But now we see all that accomplished was teeing up Republicans to hand yet more money to the ultra-wealthy.