Policy Götterdämmerung

What the Republicans are about to pass is just so amazingly bad and depressing, I’ve had a hard time bringing myself to write about it.  You know I’m not about hyperbole, but this is truly, epically bad public policy about any way you possibly look at it.  Parts of various good takes:

1) Dylan Matthews with 7 stats that explain how bad it is:

According to the Tax Policy Center (whose analysis does not include the health care changes in the bill), fully 61.8 percent of the total federal tax change under the bill will go to the top 1 percent in 2027, its 10th year of implementation. They would get an average tax cut of $32,510, and the top 0.1 percent (who make at least $5.1 million a year) would get $208,060 back on average.

That’s because the wealthy disproportionately benefit from cuts to the corporate income tax, and corporate tax cuts in the bill are permanent. However, individual cuts expire at the end of 2025. Meanwhile, certain tax hikes for individuals, like a change in the inflation measure used to adjust tax brackets, remain permanently. The result is a substantial across-the-board tax increase for Americans not rich enough to own stock, financing large corporate cuts that benefit the rich…

But within the 10-year window, the Joint Committee on Taxation has estimated the bill costs more than $1.4 trillion. That undercounts the likely real cost, if all the other provisions are actually extended, considerably. The Committee for a Responsible Federal Budget estimates that the true cost if everything is made permanent (as Republicans are promising) is $2.2 trillion over 10 years, and more after that.

Now, maybe you think that the deficit is currently too low, because interest rates on federal debt remain pretty low, the economy isn’t growing particularly fast, and adding some grease to the wheels to get things moving a bit faster would be a good idea. But even in that case, it’s worth asking whether a $1.4 trillion to $2.2 trillion expansion of the federal debt for the purpose of lowering corporate tax rates is the best use of that money from an economic growth perspective, compared to expanding subsidies for parents to help them work and raise kids, or investing in infrastructure.

2) A historian’s take in the Post:

“There are two ideas of government,” William Jennings Bryan declared in his 1896 “Cross of Gold” speech. “There are those who believe that if you will only legislate to make the well-to-do prosperous their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous their prosperity will find its way up through every class which rests upon them.”

That was more than three decades before the collapse of the economy in 1929. The crash followed a decade of Republican control of the federal government during which trickle-down policies, including massive tax cuts for the rich, produced the greatest concentration of income in the accounts of the richest 0.01 percent at any time between World War I and 2007 (when trickle-down economics, tax cuts for the hyper-rich, and deregulation again resulted in another economic collapse).

Yet the plain fact that the trickle-down approach has never worked leaves Republicans unfazed. The GOP has been singing from the Market-is-God hymnal for well over a century, telling us that deregulation, tax cuts for the rich, and the concentration of ever more wealth in the bloated accounts of the richest people will result in prosperity for the rest of us. The party is now trying to pass a scam that throws a few crumbs to the middle class (temporarily — millions of middle-class Americans will soon see a tax hike if the bill is enacted) while heaping benefits on the super-rich, multiplying the national debt and endangering the American economy.

3) Greg Sargent:

Now Trump and the politicians, working together, are set to pass a tax plan that will lavish enormous benefits on people like Trump — and in key ways further rigs the system on their behalf.

In a big speech yesterday about the plan, Trump declared that “this is going to cost me a fortune” and added: “I have some very wealthy friends” who are “not so happy with me.” But as Kessler’s fact-check shows, this is nonsense. Both GOP plans repeal the estate tax or make the exemption vastly larger (which would benefit Trump’s family after he shuffles off to account for his life to his maker). They repeal the Alternative Minimum Tax, which is designed to ensure that the rich pay at least something. They both give preferential treatment to “pass-through” income, the vast bulk of which goes to the top 1 percent, and Trump owns an untold number of pass-throughs.

We don’t know precisely how the final plan would apply to him now, but this is because Trump has not released his tax returns (his argument is basically, “I’ll lose out bigly, believe me”). But based on 2005 Trump tax returns that have leaked, Kessler shows, under the plan Trump would have saved anywhere from $35 million to $42 million that year.

But this is not just about Trump. The Senate tax plan is basically a huge permanent corporate tax cut, tailored to fit within deficit and procedural constraints by setting the benefits for the working and middle class to expire, making it possible to pass entirely on party lines a large permanent tax cut overwhelmingly benefiting the top 1 percent, facilitated by a tax hike later for as many as 50 percent of less-fortunate taxpayers. This sort of legislative chicanery is, at bottom, just what Trump decried — very wealthy donors benefiting from politicians cleverly gaming the system on their behalf. It’s the very scam Trump vowed to put to an end. [emphases mine]

4) Michael Tomasky:

I’ve been writing about American politics for a quarter century now, and I have read in considerable detail about every major tax bill that Congress has passed in probably the last 80 years. And I can tell you that nothing remotely like this has ever happened. In terms of both process and substance, it’s utterly without precedent.

The process, I’ve written about before. To push through legislation like this with literally zero hearings in the House and one in the Senate, which took testimony from one witness, is a mockery of democracy. No one can defend this. It’s a disgrace.

And as for the substance—well, it’s dreadful, and it’s tied to the process, of course, because a package of lies and giveaways like this could never survive a transparent legislative process.

This bill goes far beyond what all past Republican tax bills have done. In the past, Republican plans took care to ensure that the middle class got a tax cut, too. The rich got far more of course, but as long as the middle class got something they could sell it as a middle-class tax cut.

Now, even that thin pretense is dead. This will raise taxes on millions of middle-class people, as earners making $40,000 to $50,000 will by 2027 be paying $5.3 billion more while millionaires will pay $5.8 billion less. Republicans just no longer give a crap. They’re like the family alcoholic who used to at least try to hide it, sneak his nips in the attic, but now no longer even bothers trying to hide.

5) Love Chait’s broader take:

To the outside world, it might seem bizarre that Ryan would tolerate the slow transformation of his party into authoritarianism and naked racism, only to rise up in righteous indignation over a defection on a tax bill that nonetheless passed easily. Ryan is a man of principle, and his principles are shared by many if not most members of his party’s elite. Their fixation with cutting taxes and their tolerance for the president’s abuses of power are both expressions of these principles. We need to understand these beliefs and what they imply.

In addition to their belief in the curative powers of supply-side economics, and their desire to reward their donor base, conservatives consider redistribution a monstrous moral evil. Tax cuts represent a victory in a cause far larger than squeezing out a couple tenths of a percent of economic growth or another private jet for their rich friends. This belief pops up when wealthy conservatives compare progressive taxation to the Nazi persecution of the Jews — a belief they share, despite the inevitable backlash, with surprising frequency…

What are they telling us with these comments? They are revealing that there is something more than dollars and sense at stake. They believe a political system that allows the majority to vote themselves a raise by taxing a minority is a form of persecution.

Economic libertarianism is the quality that most sharply distinguishes the modern Republican Party from conservative parties in other democracies. Economic libertarians consider the free market to be the sole fair arbiter of the distribution of wealth. If I have earned 100 times the average wage through acts of capitalism between consenting adults, the theory goes, then I am entitled to keep it. For hard-core economic libertarians, this absolute right to property supersedes all other rights…

Liberals have had trouble grasping the willingness of conventional Republican politicians like Ryan to cooperate with Trump’s repeated violations of democratic norms. Why violate a core ideal like the sanctity of the republican form of government, they wonder, for a meager reward like tax cuts?

From the standpoint of a Paul Ryan, however, he is not selling out. He is advancing his highest ideals of public service. The tax bill, protecting the makers from the predations of the takers, represents one of the great triumphs of freedom of his adult life.

6) So much for everybody’s favorite maverick, McCain.  Jennifer Rubin:

Today he largely eviscerated his own message and plea for Senate comity when he announced that he’d support a partisan tax bill that is every bit as contemptuous of regular order as was the health-care bill. He said in a statement: “I believe this legislation, though far from perfect, would enhance American competitiveness, boost the economy, and provide long overdue tax relief for middle-class families.” Of course, he could have demanded a better, bipartisan bill produced through regular order — and kept his reputation as a man above partisan politics intact.

7) A handy chart from CBPP:

Senate Tax Bill More Skewed to Top Than Bush Tax Cuts -- Even Without Counting Its Health Coverage Effects

7) And, a way under-covered story.  This is also backdoor ACA repeal and could have large, very negative consequences for American health and health care.  Sarah Kliff:

Repealing the individual mandate would cause premiums to spike, millions to lose coverage

The Senate bill includes a provision to repeal the Affordable Care Act’s requirement that nearly all Americans carry insurance coverage, known as “the individual mandate.”

Republicans see it as a winning move. The individual mandate is very unpopular. And repealing it will save more than $300 billion — which can pay for big tax cuts for corporations and the very wealthy.

The best economic evidence we have shows that if the individual mandate disappears, premiums go up and millions of Americans lose coverage. The Congressional Budget Office pegs the decline in the number of insured at 13 million.

8) And let’s wrap up with a few good tweets:

Seriously, this is just horrible, horrible policy.  Unless, as Chait so aptly points out, your overarching political value is making life easier for rich people.  Even then, it’s short-sighted as they’ve got to live in a country with the rest of us.  Ugh.  Ugh.  Ugh.

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