How the Tax Bill Backfired on the Republicans

Tom Williams/CQ Roll Call via AP Images

House Speaker Paul Ryan and Majority Leader Kevin McCarthy conduct a news conference in Washington

Did you have a happy Tax Day? Are you feeling grateful for the Republican tax cut?

Evidently most American taxpayers are not

In a sublime case of poetic justice, the so-called Tax Cut and Jobs Act (TCJA) is backfiring on the Republicans big time. Most voters are unimpressed, and Republicans themselves are ceasing to emphasize it in their campaign material. 

In the March 13 special election for the Pennsylvania 18th House district, where Democrat Conor Lamb narrowly beat Republican Rick Saccone, Republicans actually pulled adsthat bragged about the tax act, because their polls showed that it was more of a target than an achievement. 

Republican strategists who wanted President Trump to emphasize the tax cut this spring were initially annoyed that Trump was talking about trade, immigration and Korea instead. Now they realize that Trump may be onto something.

Even better, Democrats are sensing that the tax issue can be turned against the Republicans big time in the 2018 and 2020 elections. This outcome is the resultof Republican overreach, opportunism, and sheer greed. 

Previous Republican tax cuts, under Ronald Reagan, and George W. Bush, were also tilted to the top, but they made sure to include some real benefits for regular people. But this year’s bill was so heavily skewed to the wealthy that most people don’t seemore than trivial benefits in their paychecks. 

In their excess, Republicans also managed to accomplish something—for their opposition—that has entirely eluded Democrats on tax politics since Reagan: total party unity. Reagan’s two big tax cuts in 1981 and 1986 peeled off lots of Democratic votes in Congress. Though the substance of the supply-side cuts was bogus, many Democrats figured that if the bill was going to pass anyway, they should share in the credit. The same thing happened with the Bush tax cuts of 2001 and 2003.

This time, however, the tax bill was both so extreme in its substance, and so purely partisan in the way it was enacted, that not a single Democrat in either house voted for it. 

Republicans were counting on the sheer complexity of tax policy to put one over on the voters. But they missed one aspect: By increasing the deficit to the tune of some $1.5 trillion dollars over a decade, they were setting up demands for offsetting cuts in widely supported programs like Medicare and Social Security. And that’s easy to grasp.

Those calls are already coming, from Republicans who belatedly and disingenuously discovered the tax bill’s impact on the deficit. This presents a fat target for Democrats.

Some of the specific measures, such as the $10,000 limit on the deductibility of state sales and income taxes and local property taxes, were intended to punish voters in blue states with relatively progressive taxes and decent public services, such as New York, California, and several others. But there are at least twenty endangered Republican House members in such states and this spiteful provision paints a large target on their backs.

After the bill passed, many Democrats were initially gun-shy about making this a prime election issue, on the premise that tax cuts are invariably popular. But this tax cut isn’t.

The tax law also gives Democrats the chance to ask: what else might we do with $1.5 trillion dollars? For instance, a true invest-in-America program that rebuilds archaic infrastructure and creates lots of good jobs. Or substantial relief from crippling college debt. 

On multiple levels, the tax act invites debates that play to the strength of Democrats.

Each claim in the Republican propaganda is phony. The growth stimulated by the bill will not enable the cuts to pay for themselves. The changes in the tax code are not increasing investment—mainly they are promoting more stock buybacks that artificially pump up share values and enrich the rich.

Far from creating incentives to reverse offshoring, the law actually enables corporations to pay a lower rate of tax on profits earned overseas. And despite a good deal of messaging by corporate allies of Trump claiming that worker raises and bonuses are the fruit of the tax cuts, the small number of raises are a pittance compared to the tax savings. 

Last week, headlines were made by the news that regulators had levied a billion dollar fine against Wells Fargo for its chronic frauds against its customers. That billion was less than a thirdof the money that Wells saves from the tax cut. 

Republicans are supposed to be for fiscal balance. But when there is an opportunity to deliver trillion-dollar favors for corporations and the rich, deficits are no problem. 

Republicans are allegedly for states rights. But this law overrides the ability of states to make their own choices about taxing and spending.

Republicans are supposed to be for economic efficiency. But this tax bill creates incentives for economically perverse activity such as stock buybacks and sheer gimmicks such as “pass through” entities where the point is not to improve the economy, merely to give the wealthy a tax break.

Trump promised to Make America Great Again. This law promotes more offshoring.

The law is such a political loser for Republicans, and the hypocrisy is so ripe, that one has to believe that Republicans sensed that this Congressional term was their last chance for a long while to grab whatever they could. They made few concessions to political realism. Republicans can expect a long period in the political wilderness, and this law will help bring that about.

The ancient Greeks held that character is fate. The tax act speaks volumes about the character of today’s Republican Party, and it will help seal the Party’s fate in coming elections. 

An earlier versionof this article appeared at The Huffington Post. Subscribe here.

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