Here is a sentence I never thought I would find myself typing in 2017: The Republican Party has decided that we should raise taxes on rich people.
Not by a lot, mind you. The effective 46 percent rate introduced in the new GOP tax reform bill is nowhere near the 70 percent top level that was not considered onerous under President Nixon — or anywhere near the 91 percent of the Eisenhower era, those halcyon days when millionaires were still very largely modest boring people who liked to go sailing on weekends and feed their children milk toast during their vacations from Philips Exeter rather than tech savants in hoodies who think that we are all living inside a computer program. But it gets close to the 50 percent Reagan thought reasonable enough at the end of his administration.
So far the party has not made much of a show about the extra 6 percent tacked on to people earning at least a million dollars a year on their next $200,000. When asked by Politico, Steve Moore of the Heritage Foundation claimed that he had never heard of the provision, which is further proof that nobody has ever read any bill ever. (For all I know there is a passage in the Affordable Care Act mandating that small businesses cover plastic surgery for all members of the family Equidae with the exception of the mountain zebra.). "I was just in a briefing with the White House on this,” said Moore. "They didn't mention that. It seems kind of bizarre to me.” Does President Trump, who once favored increasing taxes on the wealthy, know that it exists? Does anybody in Congress?
Who cares. I would not be surprised if by the time you read this, it had already been excised from the bill at the request of people like Moore and lobbyists. It won't be the only thing that people hate about the bill.
The proposed capping of the mortgage interest deduction at $500,000 is music to my ears because my own house cost less than a quarter of that. Most houses in this country are overvalued, something that the HDTV-Home Depot-property development industrial complex realizes. They will fight tooth and nail for their right to make a fortune uglifying America. Part of me hopes they lose because in the long run housing needs to become more affordable. In the meantime, what about the few remaining solidly middle-class people who, astonishingly, do live in our major cities and their vile suburbs? Sucks to be them, I guess?
None of which is to say that the bill is good, per se. Jacking up rates for the wealthy and punishing denizens of McMansion Hell for their aesthetic failings sounds attractive, but is it good policy, especially set against the $1.5 trillion in revenue expected to be lost thanks to the other cuts in corporate and individual rates? Is it really a good idea to get rid of deductions for student loan interest before coming up with a way to make tuition prices sane (and convincing people not to go to college in first place)? Even after the rate cuts, that is going to amount to a tax increase on lots of people who are far from wealthy.
The only unambiguously good thing about the bill is the proposed increase in the child tax credit from $1,000 to $1,600. You know it's good because the Wall Street Journal is denouncing it as "a check in the mail for those who owe nothing in taxes, which discourages work." As opposed, presumably, to a check in the mail for those who owe several hundred thousand dollars on their bazillions from lawyering and consulting and investing and other sweat-of-thy-face activities, which no doubt encourages it. In response, the GOP should double the child tax credit and make it fully refundable, as Sen. Marco Rubio (R-Fla.) proposed during his presidential campaign.
As with everything the Republican Party in Congress proposes these days, there is very little evidence of design at work in the new bill. It is not entirely clear what they are trying to accomplish. Are they hoping to punish people who live in blue states and college graduates everywhere? Then why not just raise their taxes outright? Why are they eliminating the estate tax? Haughty upper-middle-class white liberals — the real enemy — don't have large estates; instead Republicans should be imposing a 20-percent surtax on yoga-related income and confiscating the profits of boutique doggie hotels.
The new GOP tax bill is the least bad thing the party as presently constituted could have come up with. That doesn't mean it's good.