The tax plan of a broken party
Most Republicans won't like the Republican tax plan. So why is the party leadership pushing it?
In a political year marked by unprecedented partisan rancor, political infighting, and noxious scandal, there's something comforting in the perfectly predictable spectacle of a Republican Party in control of the White House and both houses of Congress releasing a bill to cut taxes.
Nothing could be more in keeping with the priorities of the GOP since the election of Ronald Reagan in 1980 than the effort to lower tax rates, especially for wealthy individuals and businesses. But that doesn't mean it makes sense in 2017.
Because the fact is that in 2017, the Republican electorate is deeply, perhaps fatally, divided on a range of issues — and that very much includes taxes. A functioning party is supposed to channel public opinion into policy. But that's not what the GOP has done with the bill released Thursday morning. It's taken the priorities of the party's donors and less than half of the party's voters and championed them at the expense of the preferences of everyone else.
That's the behavior of a broken party.
This doesn't mean "The Tax Cut and Jobs Act" won't pass Congress in some form. Maybe the terror of the political consequences of failure, coming after a months-long futile effort to repeal the Affordable Care Act, will be enough to motivate sufficient numbers of Republicans in both houses to rally around the bill. But that doesn't mean it reflects the preferences and priorities of rank-and-file Republicans. On the contrary, it's a further sign that the GOP is failing to function.
Though the first of two recent polls from the Pew Research Center reveals that a plurality of Republican and Republican-leaning voters support lowering tax rates for both corporate (41 percent) and household income over $250,000 (36 percent), the numbers on the other side are significant. Fully 55 percent of respondents favor raising corporate taxes or keeping them at their present levels, while 59 percent support leaving unchanged or increasing rates on high-earning households.
That's a portrait of a sharply divided party.
Democrats and Democratic-leaners, by contrast, are far more unified on the issue, with fully 88 percent favoring higher or unchanged corporate taxes and 83 percent preferring to keep taxes on upper-income households the same or raise them. Put both parties together, and we end up with an overwhelming majority of voters (73 percent) favoring higher or the same corporate tax rates and an almost identical number (72 percent) preferring to see an increase or lack of change in high-end household rates. In a functional party system, this would serve as the basis for a broad-based tax-reform bill that modestly raised taxes on corporations and well-to-do households. But no such bipartisan bill is possible — because our party system is dysfunctional, in large part because of the incoherence of the present-day Republican Party.
We can see that incoherence across a range of issues in the second and more recent Pew poll, which paints a portrait of a Republican Party also deeply divided on immigration, the desirability of free trade, and gay rights.
If the electoral system in the U.S. were compatible with multiple parties, a party with as many fractures as the contemporary GOP would probably break apart into two, and perhaps as many as four, parties. But our first-past-the-post and winner-take-all system, which strongly favors two parties, comes close to guaranteeing that the fractious GOP will stay intact — or that any split will be quickly healed in a broader realignment of the two parties.
Another response to deep division within the party might involve its leadership seeking to split the difference and pursue moderate or compromise policies that try to give each faction a little of what it wants. That might lead to a tax bill that modestly raised taxes on the upper end and cut them for those who earn less. Instead, House Speaker Paul Ryan appears to have chosen to relentlessly pursue the preferences of one faction — the upper-income and corporate tax-cutters — at the flagrant expense of the others. That's no doubt because Ryan personally favors tax cuts, as do the president and the party's richest donors. This creates enormous leverage on the tax-cutting side of the ledger when it comes to drafting legislation. (On other issues, like immigration, the party's factions don't align so cleanly, which is no doubt one reason why the GOP has done so little on those issues during the first year of the Trump presidency.)
But it also means that a large faction of the party will oppose (or at least have mixed feelings about) such legislation, increasing the likelihood that significant (and perhaps decisive) numbers of elected Republicans will prefer to see the bill go down to defeat. We saw this dynamic play out over and over again during the debate over the repeal of the Affordable Care Act, and we're likely to see it again as The Tax Cut and Jobs Act wends its way through the House and Senate.
There are two possible outcomes to this process, neither of which is good for those leading the party or its integrity over the long haul. Either the party's divisions will make it impossible to pass the bill, which will in turn make the Republican establishment look completely inept — or the bill will pass over the objections of a significant number of the party's voters, which will hobble the party going forward.
Either way, the GOP’s mess is primed to get messier, with the chances of a Bannon-led revolution or an all-out civil war in the party increasing with every passing day.