Trump tax cuts: A 'win' for the GOP, a disaster for the rest of us
Oct 20, 2017 at 11:15 AM
With the Senate's passage of a budget framework on Thursday night, Republicans hope to enact a sweeping overhaul of the tax code by Christmas. What that "sweeping overhaul" entails, however, we don't really know, except that it cannot possibly live up to all that President Donald Trump has promised. His biggest tax cut in history will put $4,000 to $9,000 in the pockets of average families, spur massive economic growth and lead to a balanced budget within eight years. Or so he says.
No question, U.S. tax code needs simplification and reform. Virtually everybody agrees about that — an amendment to the Senate budget bill calling for making the "American tax system simpler and fairer for all Americans" passed 98-0. But that's not what this is about. Republicans recognize that their serial failures to accomplish anything of substance (besides the confirmation of a Supreme Court justice) during a period when they control the White House and both chambers of Congress is a recipe for electoral disaster in next year's midterm elections. On issue after issue, President Trump has demonstrated that he doesn't care about policy or principle so long as he can claim a win, and in this instance, Congressional Republicans are just the same.
Once the Senate passes a budget resolution, Congress still faces some hurdles before it can tackle tax reform. Here are the next steps:
Oct 19, 2017 at 3:00 PM
Sen. Bob Corker, the Tennessee deficit hawk whose impending retirement has prompted him to a notable streak of truth-telling, called the path the Senate is on a "hoax" and said that "unless we create a real budget process, which this is not, our country's fiscal situation is going to continue to go down the tube." Indeed, the legislation allows for a $1.5 trillion more in deficits over the next decade. But did he vote for the bill? Yes, he did.
Sen. John McCain, in casting the decisive vote against the repeal of the Affordable Care Act, castigated Senate leaders for attempting such a massive undertaking on a party-line basis and without real hearings or meaningful input from both parties. But the tax plan is currently being drafted in secret by a cabal of top Republican lawmakers with the details shielded from the public. Though the process ahead is likely to involve hearings, the whole purpose of Thursday's vote was to set the stage for tax cut legislation that could pass on a party-line vote in the Senate. Did Senator McCain vote for it? You bet.
Sen. Susan Collins balked at tax cuts for the rich attached to the attempted Obamacare repeal, and two years ago, she was the only Republican senator to vote against a plan that would have led to the repeal of the estate tax. She says she wants tax cuts to help the middle class, but what details are known about the Trump proposal suggest it will disproportionately benefit the wealthy (him included) and could actually lead to higher taxes for some middle earners. She voted for the budget bill anyway.
Senate Republicans are on track to approve the fiscal 2018 budget, which paves the way for President Trump's tax cuts. It allows $1.5 trillion to be added to the deficit, which Republicans say will be covered by future economic growth.
The only Republican senator to vote against the plan, Rand Paul, did so not because the tax cuts will blow a massive hole in the budget or because they will require huge cuts to Medicaid, Medicare and assorted safety net programs. He objected that the plan didn't adhere strictly enough to previous spending caps, but that won't stop him from voting for whatever tax cuts emerge. "I'm all in for tax cuts @realDonaldTrump," he tweeted Friday morning. "The biggest, boldest cuts possible — and soon!"
Republicans may want a win, but the rest of us are going to be paying the consequences. And sadly, we know exactly what they will be. How many times do we have to try the same idea to realize that massive tax cuts for corporations and the wealthy don't translate into higher wages and better standards of living for the poor and middle class but instead massive deficits and widening inequality? If the goal is really a simpler and fairer tax code, Congress should slow down and debate the legislation in the light of day. That would be a "win" for all of us.