When the GOP unveiled the outline of their big tax reform plan last week, they billed it as one of the largest tax cuts in history. If only that were true. It cuts the corporate tax rate which even Democratic economists (not politicians, they have to demagogue everything) see as necessary. This is easily the strongest point in the plan. But there’s now a hitch even there.
All of our western nation competitors have cut their corporate tax rates in recent years (Germany went from 40% to 15%!) leaving the U.S. as the highest rate in the industrialized world at 35%. That makes U.S. soil uncompetitive, and that’s bad for American jobs, companies and the economy. So, yes, that is good and necessary — but more later as even it may be imperiled.
Once we get past that corporate tax cut, there is very little cheer from a conservative perspective for individual American taxpayers. There’s an actual tax increase for the wealthy with a bubble tax rate of 46% for those earning more than $1 million until they make up for a tax cut at the lower ends — which pay hardly any taxes now at all. So an actual tax increase! How is that in any way conservative? Does anyone need reminding that the rich are already carrying most of the income tax load — far more than their “fair share?” Or that it is the rich who are the job-creators? Apparently just the party representing conservatism.
It will change from here for the worse as it looks to get votes in both chambers. But overall, it looks a lot like the GOP tax cut plan is largely a sop to class warfare, a totally swampy cave from the most basic principles of conservatism. Outside the corporate tax cut, it is nothing more than Democrat-lite. It looks like one big shell game to ensure that the government keeps growing and the “rich” get soaked, because rich people are, you know, evil.
Getting into the details is not worthwhile as it will change. Essentially, it reduces tax brackets except the highest one and eliminates some deductions — that latter of which means more taxes paid.
Fortune magazine fact-checked the middle class cuts and found a mixed bag:
“But the proposal’s conflicting provisions and phase-outs of certain benefits suggest that taxes could rise for some middle-class earners over time. Middle-income people in states with high state income taxes or who have many children, high medical bills or heavy student debt are particularly at risk of a bigger tax hit. Others may benefit modestly from the lower tax rates and revamped credits and deductions.”
Remember, this proposal is essentially the starting negotiating point. If the swamp acts as normal, what will happen from here is that this proposal will be larded up with more special interests and hidden garbage like the bubble tax and become worse. Bottom line: We could end up with even worse than we have right now.
Good job, guys. Glad we gave you a majority so you could act like little Democratic class warfare warriors and make sure leviathan keeps chewing us up — while pitching it as this huge tax cut. More and more conservatives outside the ruling class are catching on as the details get examined.
This all is more than disappointing. Just like repealing Obamacare (although that was really on a small number of Senate Republicans who lied during re-election, including John McCain.) Just like keeping the Dreamer Act (Trump.) Just like no money for building the wall (Congress.)
The only big promises kept so far are by Trump on deregulation and appointing conservative justices and judges — few of which have been confirmed, yet. That’s a pretty short list of promises kept, and none of them from the GOP-controlled Congress.
The Republican Party used to stand for basic conservative principles: limited government, reduced tax burdens, de-regulation over an overly regulatory state, personal responsibility, individual freedoms, equality under the law.
Where are these to be found in this tax plan? Where are they found in the budget outline approved previously? Where are they in the various (and failed) Obamacare repeals? Where are they in building a wall and enforcing existing laws?
Do we have a party of limited government or do we have Democrats-but-burden-Americans-more-slowly?
Where is President Trump on the tax proposal?
Populists and conservatives look at the tax code differently.
Since Trump is more populist than conservative in philosophy — although a lot of his policies have been conservative — it was incumbent on actual supposed principled conservatives such as Speaker Paul Ryan to come through with strong tax reform that made American corporations more competitive, gave all Americans tax relief and for goodness sake, shrank government.
This does the first, but whiffs on the next two.
However, Trump was the avatar for Americans who wanted change, who knew we needed change. Washington was a place filled with self-promoting creatures who cared first and only about re-election as their pathway to power, prestige and wealth. They feed the beast.
And it works great for them, for lobbyists, for bureaucrats, for the nest of hangers-on that feed off ever burgeoning government. But not for Americans. And many Americans know this. Washington long has been out for only Washington. Trump was seen as someone who might be able to at least take a step forward in draining a little of the scumminess out, shake up the status quo.
So while he is a populist, it was still disappointing to see him so strongly onboard with this “biggest tax cut in history” nonsense. Part of this may be because Republicans aren’t presenting what he wanted. But part is because of the mantra that “Republicans need a win!”
Here’s an idea. How about if Americans get a win?
Starting to make any real change in Washington, D.C. requires an almost revolutionary vision for a Capitol that works for Americans. Trump rightly identified the problem being the seedy Washington culture. But tweeting and complaining about it doesn’t change anything. And calling a questionable class warfare tax plan the biggest tax cut in history doesn’t change the swamp, either.
Potential saving grace — repeal Obamacare mandate
Republicans are looking to include repealing the Obamacare individual insurance mandate. That would totally change the dynamics and value of the tax plan…if they actually do.
This is a two-fer winner. The first and most important part is that it is a win for individual American liberties. Personal freedoms from heavy, distant government intrusion is a bedrock conservative principle.
The individual mandate is maybe the most onerous element of Obamacare. Forcing all Americans to buy a private-sector product was always an atrocity — upheld 5-4 by an outrageous U.S. Supreme Court decision that put the reputation of the Court above the rights of the American people by calling the mandate a “tax.” The result was that it ended up eroding both. A terrible decision. Getting rid of this monstrous assault on individual liberties is a huge benefit.
Second, it’s good for Americans’ wallets by allowing millions to choose not to have insurance, or traditional health insurance, and keeping money they earn to spend how they choose.
Democrats would undoubtedly demagogue such a move — they laughably denounced the original proposals as tax cuts for the rich before even seeing it, because they are on autoplay — and the media would report the move as “throwing 13 million off their health insurance.” But of course it does no such thing. It allows people the choice, and an estimated 13 million Americans would choose not to have insurance. See how that works, media? Americans should have that freedom.
House leadership seems onboard with doing this, although it was not in their initial proposal. It still may be. However, the Senate plan revealed today does not include the mandate, and delays the corporate tax — the only strong element — for a year. Any delays are problematic because too often it has meant that it never actually happens.
The entire tax “reform” efforts just further reveal how badly the swamp needs draining — and how difficult that is to do.
EDITORS NOTE: This column originally appeared in The Revolutionary Act.