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.