The more I read about the Republican tax legislation, the more outlandish and outrageous it becomes. Its tilt in favor of the rich is its greatest sin, remarkable in its brazenness. Those who could benefit the most from a tax cut — people earning less than $25,000 — would receive the paltry sum of $50 with the proposed plan. Meanwhile, the benefits to the richest among us are extraordinary.
Apart from needlessly increasing inequality in the United States, we need to bear in mind that the plan will also likely mean cuts down the road into programs that benefit ordinary Americans, as the GOP will use the deficits created by the tax plan to justify such reductions. At a basic level, Republicans are making a choice to return tax money to the wealthiest among us, rather than using that money for the public good. Call me cynical, but I don’t think that those wealthy people are going to turn around and spend their money on things like student lunches, health insurance for children, or much-needed infrastructure projects.
But the foulness of this bill only grows the more you dig into it. Perhaps most extraordinary is the way the plan seems designed to raise taxes on blue state populations to the benefit of Republican-leaning states. The single largest factor here is the elimination of deductions for state and local taxes, which disproportionately benefit Democratic-leaning states; as noted in an op-ed by political scientist tag-team Jacob Hacker and Paul Pierson, “all of the states that have above-average use of the state and local taxes deduction voted for Hillary Clinton in 2016.” Lest you think we are talking small amounts here, these changes would result in increased taxes of $1.3 trillion over 10 years for taxpayers in those states. Hacker and Pierson note that the other major tax break slated for downsizing is the home interest deduction, which would also have a disproportionate effect on Clinton-voting states.
At a basic level, hitting the state and local tax deductions punishes taxpayers of states that spend more on government. That is, if the voters of a state choose to tax themselves more heavily in order to provide better education, superior health care, or a cleaner environment, the Republican tax bill effectively hurts them for using government to promote the public good. Another way of putting this: the Republican tax bill penalizes states that dare to use democratic governance to build their common future.
The dangers of using the tax system to punish entire states and reward others are not only political, though those are frightening enough; after all, the use of state power to harm opponents is the stuff of authoritarian governments, not democracies. In the words of one prominent conservative from the Heritage Foundation, “The big blue states either cut their taxes and costs, or the stampede of high-income residents from these states accelerates. The big losers here are the public employee unions — the mortal enemies of Republicans. This all works out nicely.”
And beyond this naked power play, there are real economic costs that we’ll all be paying, blue and red states alike; according to Hacker and Pierson,
Red America may hold the key to Republicans’ control of government, but blue America holds many of the keys to our nation’s economic future. Indeed, among the blue-state pay-fors, the most troubling may be those that will bleed institutions of higher education, particularly in the House bill. In their zeal to extract revenues from blue states, Republicans are threatening our nation’s ability to excel in a global knowledge economy.
These concerns become still more palpable due to the inclusion of various provisions in the tax plan that seem to specifically target the ability of working and middle class people to advance both educationally and economically. The Center for American Progress shows that the House plan cuts education benefits by $65 billion over 10 years. Among the specifics, student loan interest could no longer be deducted, and tuition reductions for grad students would be treated as taxable income. Until now, there’s been a federal Lifetime Learning Credit that provides $2,000 annually for things like grad school and job training; but apparently the proper role of government no longer involves helping people get an education, so this is going away as well.
The final tell that this tax legislation has everything to do with favoring the 1% is the fact that, after literally years of fighting Barack Obama over allegedly out of control government spending, and insisting that the national debt was the greatest of threats to our country, this proposed legislation will add $1.5 trillion to the deficit over 10 years. That’s money on which interest will need to be paid, and the bill’s skew toward the rich means that it will be the middle and working classes that disproportionately foot the bill for giving the Richie Riches of the country still more money to buy new Jaguars, jewels, and vacation homes in gated communities safe from the rank and file of average Americans. As a New York Times editorial puts it, “Republican leaders aren’t just trying to transfer money from current middle-class and poor Americans to corporations and the very wealthy. They are also trying to transfer money from future middle-class and poor Americans to corporations and the very wealthy.”
This bill has “political suicide” written all over it: its deep unpopularity in public opinion polls suggests that most Americans aren’t falling for the con, and it’s difficult to believe that many who see their taxes go up next year won’t be a hard sell to vote GOP going forward. But it’s no surprise that Republicans are trying to implement the type of cuts they’d only been able to dream of through the Obama years. Having lived with the fantasy for so long, they seem disinclined to face up the possibility of electoral backlash, instead soothing themselves with thoughts that the public is too inattentive to notice how they’re about to be screwed. That’s a hell of a gamble. This bill may well pass; but whether it does or not, this tax nightmare will be a weight around the neck of every Republican senator and representative come 2018.
