Republicans Trying to Sell us a Bridge on Tax Cuts

Give Hugh Hewitt his due. If nothing else, the conservative talk show host and Washington Post columnist has the courage of his convictions. Hewitt is ready to sacrifice virtually anything to see victorious the Republican plan to substantially cut taxes on corporations and the super-rich while conferring on middle-class families a token tax cut at best and a tax increase at worst.  No proposal is too morally corrupt or politically suicidal if its aim is to lighten the tax burden for those at the top.

Republicans want a tax cut, or tax “reform,” that reduces the nominal tax rate on corporate income by 15 points, from 35 percent to 20 percent. Republicans also want to eliminate the estate tax paid only by families worth $5 million or more, as well as various other measures that mostly benefit the rich and well-to-do.

The total price tag for these cuts cannot exceed $1.5 trillion over 10 years, for two reasons, one legal the other political. Legally, Republicans cannot pass their tax cut through budget “reconciliation” with a simple majority of Republican-only votes, unless they can keep the 10-year impact to the federal budget under $1.5 trillion. Politically, the slim Republican Senate majority may not be able to pass their tax cut on a party-line vote if they lose even a few of the Republican deficit hawks who are now gagging on the $1.5 trillion that will be added to what they already view as our ruinous national debt.

In short, Republicans cannot have their tax cut and eat it too. Along with their tax cut, Republicans must either cut spending on programs or raise more revenues. So far, they seem to prefer the latter route and have already floated a few trial balloons that, when launched, have sunk like lead ones.

Cutting popular programs or raising taxes on the non-rich are problematic anytime but especially so when all the public gets for its sacrifice is a massive windfall for the most well-off.

Specifically, Republicans have talked about eliminating the deduction for state and local taxes as well as new restrictions on how much in mortgage interest homeowners can write off on their federal taxes. Both those measures disproportionately hit financially comfortable taxpayers who live in higher cost blue states. They also appear to violate the “no new taxes” pledge many Republican lawmakers have taken in the past.

This is the political quicksand Hewitt wades into with both feet with a proposal that lets Republicans keep their tax cuts but without also causing Republican deficit hawks to freak out.

In sum, Hewitt proposes that, hand-in-hand with their tax cut, Republicans enact these three changes:

First, they increase the federal gas tax paid by motorists and commercial truckers so that the users of these roads, highways, bridges and tunnels pay the lion’s share of their upkeep and construction.

Second, Republicans create a new 5 percent “delivery fee” – call it a sales tax – on all goods and services purchased on-line. This is offered as a revenue-raiser but there is also a subtext here suggesting the aim of this new fee is to level the competitive playing field between virtual retailers like Amazon.com and all those who still sell their wares from brick-and-mortar stores.

Finally, Republicans would dump Obamacare’s individual mandate so as to bank the $300 to $400 billion in premium subsidies the government now spends each year on low to modest income individuals who must buy their health insurance on the open market. Since the government would no longer mandate that everyone get insurance, or so the argument goes, there is no need for government to subsidize its purchase.

Republicans squeal like stuck pigs whenever anyone suggests they are taking away health care from ordinary Americans to finance their tax cuts for the rich. But I am not sure how else you describe a proposal that will almost certainly take away health insurance from one group of people – or make it more expensive – for the express purpose of minimizing the hit to the federal budget should the Republican tax cuts go into effect.

Indeed, what all of Hewitt’s debt-reduction proposals have in common is that the burden of implementing them falls disproportionately on everyday Americans – and so exposes the fraudulence of Republican assertions that the intended beneficiaries of their tax “reform” were middle class families from the start.

Hewitt thinks only those Republicans “who fear Democratic demagoguery” will fail to fully embrace his tax proposals. He might be right about Republican timidity. But it’s hard to endorse Hewitt’s accompanying accusation that critics of the Republican tax plan are engaged in “demagoguery” when all they are really doing is the math.

Views: 107

Comment by koshersalaami on November 10, 2017 at 10:07am

This is a complete sham. One clause is making tuition waivers for grad students taxable. These people are stark raving nuts. 

Forget for a moment about the functional disaster they're proposing, which will be miserable for business and which George W. Bush already proved Won't Work. 

On the other hand, let's look at why the Bush tax cuts didn't work, being as no one, Not Even Democrats, ever asked.

The Bush approach addressed the problem of insufficient available capital.  Except that's not the problem. 

Why did the wealthy pocket their tax cuts instead of using them to invest in ventures that hire people? 

There's only one possible answer:

Those ventures weren't profitable enough. 

Why not?

last figures I saw, the poorest 40% of,the population had 0.3% of America's wealth. 

This means that for a lot of businesses two out of every five American customers are AWOL. 

If we want investment, increase demand. Put money in their hands. Unlike the rich, they have to spend it quickly. 

Let's look at who the Republicans are protecting with getting rid of the estate tax. Let's say that one of the Koch brothers dies and leaves his entire estate evenly divided to his wife and kids. One of them has three kids. Let's use that example. 

Let's say the estate tax were a draconian and effective 99%. No shelters. Government gets 99%.I'm not suggesting that, by the way. Upon his death, his wife and kids would be forced t survive on a little over one hundred million dollars.

APIECE.

That's with 99%. They want ZERO.  

No one who proposes this is serious about deficits. And no one who proposes this could possibly give a damn about the middle class. 

Comment by Ted Frier on November 10, 2017 at 10:54am

I couldn't agree more.  Today's conservatives behave as if an economy is linear.  Do X and Y happens.  Give the rich tax cuts and you will get economic growth and jobs.  Even their economics is one sided instead of two -- "supply" sided.  Yet, as you suggest, economies are not causal but relational.  A healthy economy is one in which there are mutually supportive balances between supply and demand, production and consumption, whereby an optimal distribution of wealth matters.   If the free market cannot find that balance on its own automatically through the price mechanism then some outside entity (the government) has to step in to fix things, usually through taxes that move capital from unproductive uses to where it can do more good.  It's human nature to want a bigger slice of the economic pie.  But if just one or a few get the whole pie then everyone starves since there is no one left to make the pies. 

Comment by Ted Frier on November 10, 2017 at 10:56am

Yes, the GOP position on deficits is amazing.  Deficits really don't matter -- provided they are caused by things Republicans like, such as tax cuts, instead of the stuff Democrats like, spending money on programs and things.

Comment by koshersalaami on November 10, 2017 at 11:16am

Except spending money in programs and things stimulates the economy and brings in tax revenue. Which Democrats rarely talk about, because they spend that money for other reasons. Democrats are better for the economy by accident. 

Comment by Safe Bet's Amy on November 10, 2017 at 12:54pm

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Comment by Ted Frier on November 10, 2017 at 1:07pm

I've never understood why conservatives don't get the importance of keeping supply and demand in balance even if it does mean the government has to be the buyer of last resort, in the form of transfer payments to the poor who immediately put it to use in the economy.  Or maybe they do get it but it is one of those inconvenient truths.

Safe Bet Amy: I am astonished at the shamelessness of the falsehoods they are peddling.  How do you eliminate deductions for medial expenses and college tuition but still keep the carried interest provision for billionaire hedge fund managers and then go out and with a straight face call this a middle class rescue bill?  Have we really become this corrupt?  Don't answer that!  

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Comment by Maui Surfer on November 12, 2017 at 12:01pm

Lets take a little trip down memory lane and the absurdly low quality of Rethug officials- Bush the Greater chose Quayle, wow! He won anyway, but lost the second time and the idea we had no idea he would live this long must have factored. McQuack chose Palin, and thank Dog for that, imagine if he won- dystopia would have been real and not literary, again. An otherwise fairly smart cat, despite being a homophobic bully dick-wad with a Joseph Smith complex, picked Ryan, and absolute school boy math F student in an ill fitting suit, somehow meant to hide his muscles which he gets from spending more time in the capital gym than on legislation, thankfully. A Randian simpleton who makes fuzzy math look like Relativity Theory. Now we have Pence, the evil Church Lady of all time, afraid to even be alone with a pair of breasts not his own. But, look down at your tax cut crew- again there he is Lyin'Ryan, so full of shit it defies description, but now, as a competitor for worst fitting suit ever, he has Mulvaney, who seems like he escaped from One Flew Over The Cuckoo's Nest, as his right hand "man" a born liar if there ever was one in our so called "Treasury" Secretary, who steals houses from retired old ladies, all surrounded by a pack of liars who ran up the deficit themselves through a lied into war, and now want to literally destroy the country and go back to living in gated communities which reflect the "Lifestyle of the Rich and Famous" ... of the Dark Ages.

Less than one year to go to get these lackeys out ...

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