When we see that the Republican tax legislation showers corporations and the rich with bundles of cash, while plundering the wealth of the middle and working classes to pay for this largesse, and on top of that drives up the deficit on the order of $1.5 trillion dollars, what we are witnessing is not tax reform but class warfare by means of federal law. And with provisions that particularly raise taxes on citizens of states that have voted Democratic in the last several presidential elections, we see again that this is not tax reform, but use of the tax power as a weapon to punish political opponents (conversely, provisions like a removal of a ban of political activities by tax-free churches rewards far-right evangelicals, allies of the GOP).
Republicans tell a tale of how Americans businesses are crippled by high taxes, even while it seems impossible to find an economist who says that businesses actually end up paying those high taxes, what with the loopholes and deductions already available under current law. And claims that high taxes make the U.S. less competitive are belied by the fact that the American economy’s boom times in the 1950’s and 1960’s were a time of much higher corporate taxes, and by the complementary evidence that current business leaders would rather plow their tax windfalls into stock buybacks than invest in future products or, heaven forfend, pay higher wages to their workers.
With the elimination of deductions for property and state income taxes, the GOP is exporting its anti-tax, anti-government mania to states that disagree with the notion that hollowing out education, social services, and health care should be the goal of governance. The party of small government is making sure that big government crushes the ability of states to respond to the common wishes of their voters. Apparently, we should all just shut up and be Alabama now.
We need to reckon with the fact that after literally decades of Republican lies about how cutting taxes to the rich will trickle down to the rest of the economy, the Democrats and the progressive movement have failed to discredit this notion in the public eye — for how else were the Republicans able to put forward this falsehood once again without being laughed out of the room? What may be most fantastical about this legislative process is that the Democrats are not forcefully making the logical counterargument — that in an economy as driven by consumer spending as ours, the most direct way to stimulate the economy and help corporations succeed is to provide tax relief to the lower- and middle-income people most likely to spend money. Absent in the legislation as well is any notion that the people who should get the most tax relief are those who would benefit the most from it — people towards the lower end of the wage scale who would spend it on necessities, not the wealthy who will now simply have more money to buy luxury goods. To put it in terms even a Republican can understand — the stock market will do better when all Americans have money to spend.
Or is it possible Republicans don’t believe in capitalism anymore, at least the capitalism that most Americans understand it to be? In the outright plunder of this tax bill, its robbing of our common future to reward the upper class in the present, in its tacit acceptance that corporations have no obligation to invest in America or pay their workers more, this legislation is of a piece with the monopolistic capitalism that’s taken hold while most people have been working hard just to make ends meet and support their families. Republicans would rather not draw attention to this pernicious development; but the Democrats have failed to make a larger case about the changing nature of American capitalism that would provide context for why this tax bill is such a very bad idea.
This leads us to perhaps the most frightening aspect of the bill. After decades of ever-increasing inequality in our country, this bill is like pouring gasoline on an already-raging fire. The rich, already so very wealthy, will get richer. Everyone else will get poorer. For me, most sinister are the provisions that directly assault people’s ability to move up in the world, such as ending tax deductions for student loans and grad student tuition waivers. Perhaps most unbelievably, the legislation even eliminates a small deduction for teachers who buy school supplies out of their own pockets — to the GOP, teachers are first and foremost members of hated unions to be punished, not educators of our children to be thanked for their invaluable public service.
Some are arguing that this tax bill will radicalize the majority of the country against the GOP, but I think that depends entirely on whether the political opposition is willing and able to make a forceful case for the many over the wealthy. Without such an effort, the likelier possibility is that this bill will administer destabilizing blows to the economy and the social order that will only increase the GOP’s hold on power. After all, the party, and Trump in particular, have absolutely thrived off economic inequality and people’s resulting fears around diminished economic and social standing. The racial animus that Trump stoked and profited from might have a life of its own, but it’s also deeply entwined with economic insecurity. As the promises of this bill fail to come to fruition, Republicans will have an incentive to double down on the overt racism and faux populism that Donald Trump has engineered. They will bet that people’s resentment and rage at their ever-diminishing prospects can always be channeled away from the proper targets — the increasingly powerful upper class, corporations that no longer view themselves as part of a social contract with America, and, last but not least, the GOP itself, which has done so much to clear the way for such a hideous economic state of affairs.
Democrats need to put repeal and replacement of this monstrous tax legislation at the center of their platform for taking back Congress in 2018. On economic, political, and moral grounds, this is a no-brainer. Left in place, this bill will cripple the possibility of actual tax reform and relief for Americans, and the deficits it entails will forestall funding programs that benefit ordinary Americans, from increased college tuition assistance to universal healthcare. The Democrats would also do well to put this legislation in its proper historical context; not just in relation to the increasing inequality of the past 40 years, but the acceleration of this trend in the aftermath of the Great Recession, from which the upper reaches of American society have recovered far more quickly than the majority. Less than ten years after the peak of the downturn, it seems inconceivable that policies that benefit the 1% to the detriment of ordinary working Americans wouldn't get laughed off the public stage — it's a measure of how deep our ongoing economic and political malaise runs that such a retrograde plan is about to become law.
The rich need to start paying their fair share; the working and middle classes should be rewarded for their hard work so that they can support their families and help their children achieve a better future. Corporations need to invest in America if they want tax relief, including higher wages for their employees. Progressives are discussing dozens of ideas to implement such a vision; they make a hell of a lot more sense than raising taxes on average Americans. Let’s make the Republicans regret the day they ever dreamed up this gift for the 1%.
