The Republican tax bill that passed the House and Senate has Democrats outraged, and rightly so. According to the Tax Policy Center, by 2027 a full 83% of the bill’s benefits will go to the wealthiest 1% of the population – a reality which most Americans seem at least vaguely aware of. CNN finds that only 33% of Americans favored the tax reform bill that just passed.
The bill makes its tax cuts for corporations permanent (reduced to 21% from 35% – in the 1950s it was over 50%), but the tax cuts for individuals are scheduled to expire. This was an adjustment that Republicans describe as necessary to comply with a legal technicality, and which they will fix later. Democrats claim that this provision is proof that Republicans care more about corporations than people, and doubt that there is any intent to fix it.
Even under the rosiest of conditions – assuming a sustained long-term increase in economic growth – the tax bill is expected to add about $1.5 trillion to America’s federal deficit over the next 10 years. And with this transfer of money to the wealthy becoming institutionalized by the tax bill – something that can now be treated as unchangeable like the weather – Republicans will be able to cry poor when it comes to “entitlement programs” like Medicare and Social Security that help the needy.
Senator Chuck Schumer (D-NY) declared on the Senate floor that “This tax bill will be an anchor around the ankles of every Republican,” and many Democrats believe that the unfairness of this bill will unquestionably be the final death knell for Republicans seeking re-election in 2018 and beyond.
The reality on the ground, however, may not be quite so clear. Human nature tends to forget and eventually accept even the most outrageous life changes as the new normal. For example, how often do you think about the African American woman who was shoved and spit on during a Trump campaign rally last year? How often do you think about Chris Christie basking with his family on an isolated beach after he ordered New Jersey beaches closed? How often do you think about Citizens United?
The Republican tax bill will result in an extra $172 each month for a median income family of four. While it may grate somewhat on the average American that the rich are getting far more, for many, the $172 will be an appreciated positive nudge to incomes that have been stagnant for years. Most outrage or resentment will die off and even seem baffling as the short-term benefit of the tax cut feels like a real, concrete improvement to people’s lives. Americans will accept the new tax structure as a normal – and actually not that bad – part of their lives. Further, few will associate any new deficiencies in government services and programs with their extra $172. They will instead look at those situations case by case and blame government inefficiency or lazy poor people looking for undeserved handouts.
Now comes the trap.
In response to concerns that the corporate tax cut are permanent while the individual tax cuts expire, House Speaker Paul Ryan said, “We have every intent of making those permanent — because of the Senate rules, you know why that sunset is there.” Democrats should take Paul Ryan at his word and plan ahead.
The issue of making tax cuts for individuals permanent will likely be brought before the legislature in 2018, long after Americans have grown accustomed to the extra money in their paychecks. It may even come shortly before the 2018 election that Democrats are currently feeling so confident about.
And as Republicans advocate for making the tax cuts permanent, Democratic legislators will suddenly be placed in a very uncomfortable, no-win position: vote in favor of a fiscally irresponsible policy that drains resources from crucial programs and services for the poor, or be seen as the party that wants to take money out of the pockets of American middle class families. Republicans will, of course, take advantage of this PR nightmare, playing it for all that they can, and no matter how Democrats may cry foul, the facts of the decisions that they make – in either direction – will be inescapable.
As Democrats look forward to the 2018 election they need to start planning now for the coming legislative vote to tweak the Republicans’ tax reform, and to begin strategizing how they might turn the tables on Republicans – or at least how to come out of the vote without a stain that can impact their chances in the 2018 election. If they wait until they are faced with the legislative vote, it will be too late to head off the damage.
Far brighter political minds than mine can be put toward this strategy, but at a bare minimum, the Democratic response to a bill to make permanent the individual tax cuts should be that they do want to make the middle class tax cuts permanent, but will be presenting their own bill after the 2018 election – contingent on their winning a majority in either the House or Senate – that will include some additional provisions:
- Make the middle class tax cuts permanent
- Restore the corporate tax to what it was in 2017 – especially if the current corporate tax cut can be show to have little or no impact on jobs or pay increases
- Restore the tax on people in the highest tax bracket to what it was in 2017
- Repair any damage done by Republicans between now and the 2018 election to Social Security, Medicare, Medicaid
Democratic legislators can use the Republicans’ trap in the tax bill to secure an electoral foothold in 2018 and expose the Republican/Trump agenda as being solely serving the interests of the wealthy and big business, but only if they choose to be proactive and anticipate what is waiting for them.
– rob rünt