GOP tax bill: This isn’t populism
Donald Trump ran for president promising to save the struggling middle class, said E.J. Dionne in The Washington Post. But that “populist mask” has slipped— revealing another trickle-down Republican whose loyalty is to corporations, business owners like himself, and the wealthiest Americans. Last week, with Trump’s full-throated support, Senate Republicans rammed through “one of the most scandalous special-interest tax bills” in history—a Christmas present for the GOP’s corporate and individual donors. Republicans must now reconcile the Senate bill with a slightly different House version, but the centerpiece of both plans is a dramatic reduction in the corporate tax rate from 35 percent to 20 percent, major tax cuts for pass-through businesses like Trump’s, and an estate tax rollback enabling the country’s wealthiest individuals to pass more tax-free money to their heirs. How do Republicans fund the $6 trillion in taxes they cut over 10 years? asked Jordan Weissmann in Slate.com. By imposing a $4.5 trillion tax increase on various groups of mostly middle-class Americans. This tax overhaul will deepen inequality, while rewarding “the same people and companies who have been winning the U.S. economy for decades.”
Don’t be misled by the Democrats’ “outrageous and bogus claims,” said Brian Riedl in NationalReview.com. This legislation does not represent a middle-class tax hike. The Senate’s plan doubles the standard deduction, and the nonpartisan Tax Policy Center calculates that it would give 75 percent of all families an average tax cut of $850 a year. Just 12 percent, mostly uppermiddle- class homeowners who currently itemize lots of deductions, would see an increase. Thanks to obscure budget rules, those cuts are due to expire in 2025—though it would be political insanity for lawmakers not to extend them. Even if they didn’t, “the typical middle-income family would receive a cumulative $7,000 tax cut in the early years, followed by a (roughly) $100 annual tax increase later. Still a good deal.”
Spin the numbers all you want—this tax bill sure isn’t for the “forgotten” voters Trump claimed to care about, said Paul Waldman in The Washington Post. Sens. Chuck Grassley (R-Iowa) and Orrin Hatch (R-Utah) gave the game away last week when they made two “ugly” but revealing comments. Grassley defended the bill’s weakening of the estate tax on the 0.2 percent of wealthiest Americans by saying that rich people invest their money, “as opposed to those who are just spending every darn penny they have, whether on booze or women or movies.” Hatch, for his part, said it makes sense to cut corporate taxes and reduce Obamacare and other safety-net spending, since the government currently spends “trillions” to “help people who won’t help themselves, won’t lift a finger.” Those statements laid bare the ideological belief at the heart of the Republican tax effort: Rich people are more virtuous, even if they inherited their wealth, and therefore deserve to be taxed as lightly as possible, while being poor “reflects a moral failing.”
The Republican tax bill isn’t just “a historic transfer of wealth” to the richest few, said Eric Schnurer in USNews.com. It represents a “declaration of war” on blue states and educated liberals. The Senate bill would eliminate the deduction for state and local taxes and limit the property tax deduction to $10,000. That would hit homeowners hard in New York, California, New Jersey, Connecticut, and Oregon, and disrupt the finances of Democratic- controlled governments in these states. The House plan also imposes a new tax on university endowments and treats the waived tuition fees of struggling graduate students as taxable income. If Democrats don’t like these provisions, said Kimberley Strassel in The Wall Street Journal, they should have negotiated with Republicans in exchange for their votes. Instead, they stubbornly sat this one out and “got bupkus.” As a result, Republicans will get full credit as Americans realize this legislation puts more money in their pockets and helps boost the economy into a new era of growth.
The economy may or may not benefit, said Kevin Williamson in NationalReview.com, but Congress and the Republicans certainly won’t. The frantic passage of this absurdly complex legislation was an absolute disgrace. Congress’s “downward spiral” began with Obamacare, which Democrats rammed through along party lines. But Republicans sank even lower when they passed this major t ax overhaul in the dead of night and with no public hearings and zero Democratic input—even adding handwritten amendments that lawmakers didn’t have time to read before the vote. Once again, Congress has shown itself incapable of “conducting its business in a fashion befitting the legislature of the most powerful nation in the history of human affairs.” ■