Very little gets Republicans angrier than the suggestion that the tax legislation they’re trying to race through Congress—under the cover of sexual harassment scandals and Donald Trump’s general repugnance—is a blind robbery for rich people.
Before Thanksgiving, when Sen. Sherrod Brown (D-OH) pressed Senate Finance Committee chairman Orrin Hatch on this point, Hatch blew his stack.
“I come from the poor people, and I have been here working my whole stinking career for people who don’t have a chance, and I really resent anybody who says I’m just doing this for the rich,” Hatch moaned, calling any suggestion that Republicans have the rich in mind as they scramble to pass something before the end of the year “bullcrap.”
The exchange went viral, as bitter public Senate feuds occasionally do, but in this case, the acrimony eclipsed the fact that—apart from acting pissy and calling back to his impoverished roots—Hatch had no response to Brown whatsoever.
The fact that there is no honest response hasn’t stopped other Republican leaders in Congress from pretending the bill is something it’s not.
After the House version of the legislation passed, Speaker Paul Ryan said it was “about giving hardworking taxpayers bigger paychecks, more take-home pay … about giving those families who are struggling peace of mind.”
If you’ve followed coverage of the tax bills closely, you’ll know that reporters and tax policy experts have been at pains to unspin this characterization. But there are so many ways to spot the lie, it’s worth compiling them all in one place.
1. Revealed preferences. The most obvious tell is that Republicans, particularly in the Senate, wrote their tax bills to make large corporate tax cuts permanent, while making provisions that benefit workers expire after several years. The House bill permanently repeals the estate tax, as well, while the Senate bill doubles the estate tax exemption for heirs of large estates. The proximate reason they wrote their bills this way is that Senate budget rules prohibit expedited tax legislation from increasing deficits in the long term, so they had to make at least some revenue-negative provisions expire. The fact that they chose to play brinksmanship with provisions benefitting the middle class while making sure tax cuts benefitting the wealthy exclusively never sunset, tells you everything about their priorities.
2. Look at the distribution tables. The Senate and House tax bills are different in important ways, but they have the same basic shape insofar as they both increase taxes on several million lower- and middle-income households early on, even before provisions benefiting the middle class expire. This effect is particularly pronounced in the Senate bill, which starts as a tax cut for average (though not all) middle-class families, evolves after a few years into a tax increase, and then hits millions more with higher taxes by 2027.
3. Predictions are hard, especially about the future. Nevertheless, if you’re concerned about the tax bill’s impact on the middle class, Republicans want to assure you that a Congress in the future will vote to make the expiring middle class tax provisions permanent. “We have a lot of confidence that Congress will do the right thing,” the extremely rich Treasury Secretary, Steven Mnuchin, told Fox News. “The priority for the moment is middle-income tax cuts.” This is the same Steve Mnuchin who used to claim the rich wouldn’t benefit from the Trump tax bill at all—a claim that was ultimately belied by recent revelations, including the language of the Republican tax bills, and his own apparently libidinous relationship with cash money. But even if you set aside the GOP’s credibility problems, their confidence in the future is itself a tell that they’re trying to hoodwink you. A few years ago, Congress let a payroll tax holiday for the middle class expire. Shortly thereafter, it allowed indiscriminate cuts to most of the government’s discretionary spending accounts to take effect, even though the cuts, known as sequestration, were explicitly designed to be too onerous to ever be allowed to take effect. They’re promising that the middle-class tax benefits will be extended not because they know for certain that they will, but because they want to stave off a revolt long enough to pass the permanent tax cuts for the rich into law.
4. Fickle mistresses. If the Republican tax cut bills were really about the little guy, one might expect to see some consensus within the party about how to handle tax code-changes that would affect the middle class. But in fact, the House and Senate plans differ wildly from one another with respect to these provisions. The House bill curbs the mortgage-interest deduction far more substantially than the Senate bill; the House pares back the deduction for state and local taxes while the Senate bill eliminates it entirely; the House bill repeals the medical-expenses deduction while the Senate bill does not. The House bill doesn’t touch the Affordable Care Act’s coverage mandate while the Senate bill repeals it, reducing health spending on the poor and middle class by over $300 billion. By contrast, the House and Senate GOP conferences speak with basically one voice on the driving issue of corporate tax cuts: The House bill cuts the corporate tax rate to 20 percent in 2018; the Senate bill does the same in 2019.
5. They’re all piled into the getaway car wearing their robber masks. In some ways, the most profound and persuasive evidence that Republicans are poised to plunder the treasury for the rich requires no scrutiny of the contents of their tax bills at all. Rather, one could simply observe that if Republicans weren’t poised to plunder the treasury for the rich, they’d be behaving rather differently. If these were the kinds of tax bills Paul Ryan and others describe, Republicans wouldn’t be vulnerable to criticism, nor proceeding in a rushed and partisan fashion. A bona fide middle-class tax cut would pass overwhelmingly. A revenue- and distributionally-neutral tax reform initiative would likewise be a bipartisan undertaking, and produce legislation that congressional leaders would unveil upon completion of painstaking negotiations, and not a moment sooner. The reason these bills are advancing along party lines, through an arcane legislative process that allows partisan majorities to avoid filibusters, is because they don’t help the middle class and don’t fix major problems with the tax code. Republicans are acting like they’re about to get caught lining rich people’s pockets, because that’s exactly what they’re up to.