The Greatest Tax Reform Proposal in the History of Never

Rep. Ken Buck (R-Greeley) was the only Colorado Republican to press the ‘NO’ button on the budget today.

The House of Representatives today passed its 2018 budget resolution in a party-line vote, the first step for Congressional Republicans are they endeavor to mold some sort of amazing tax “reform” policy. Reps. Scott Tipton (R-Cortez), Doug Lamborn (R-Imbecile), and Mike Coffman (R-Aurora) voted in favor of the budget; Rep. Ken Buck (R-Greeley) was the only Colorado Republican to vote ‘NO,’ where he was joined by all three Democrats from the state’s delegation.

As The Hill reports:

In a 219-206 vote, lawmakers approved a budget resolution for 2018 that sets up a process for shielding the GOP tax bill from a filibuster in the Senate…

…The budget reconciliation rules would allow Republicans in the Senate to pass tax reform without any Democratic votes, though Senate Majority Leader Mitch McConnell (R-Ky.) can only afford two defections.

Republicans used the same strategy for ObamaCare repeal but failed, and are hoping for a better outcome on taxes.

Yet there are already signs of trouble, with some Republicans questioning whether the tax proposal would add too much to the deficit, and others balking at plans to eliminate a deduction for state and local taxes. The tax plan is now estimated to add $1.5 trillion to the deficit over a decade, but that figure would grow if the state and local tax deduction is not eliminated. [Pols emphasis]

Trouble? Wait…you mean to say that Congressional Republicans aren’t unified about how to overhaul the nation’s tax laws?

The problem Republicans are facing with tax reform legislation is strangely similar to what they ran into with repeated attempts at repealing Obamacare: Lawmakers are starting to understand that what they’re being sold by GOP leadership is vastly different than what the tax proposal would actually accomplish. Senate Majority Leader Mitch McConnell, House Speaker Paul Ryan, and President Trump are in general agreement on a set of talking points that are about as authentic as a Rex Tillerson press conference. Trump and friends are trying to sell a 1988 Ford Taurus with talking points from a Ferrari dealership, and Republicans aren’t buying it:

Senator Paul is far from the only Republican confused by this new tax proposal. As NPR reports:

President Trump and congressional Republicans have pitched their tax plan as a boost for the middle class.

“The rich will not be gaining at all with this plan,” Trump told reporters during a meeting with lawmakers in mid-September.

But analysts at the nonpartisan Tax Policy Center who studied the proposal reached a very different conclusion. They predict that nearly three-quarters of the savings from the tax overhaul would go to the top 20 percent of earners — those making more than $149,000. More than half the savings would go to the top 1 percent — people who earn more than $732,800. [Pols emphasis] The tax breaks are even more tilted to the wealthy by the 10th year of the overhaul, when the Tax Policy Center projects nearly 80 percent of the savings would go to the top 1 percent of earners.

Republican leaders want to sell this proposal as a huge — YUGE! — benefit to the American middle class, but the math doesn’t add up. It’s no wonder that Senate Republicans are trying to get rid of a rule that requires a CBO score of legislation to be made public for at least 28 hours before a vote. Again, from NPR:

The tax benefits for the rich in the GOP plan are direct, obvious and easily quantified. Many of the promised benefits for the middle class, on the other hand, are indirect, speculative and uncertain…

So how do the tax plan’s supporters claim that it’s focused on the middle class? By highlighting speculative, indirect gains that are supposed to result from economic growth…

…Rather than simply promise that the government will cut the tax bill for working families — many of whom pay little income tax already — the GOP is arguing that its tax plan will promote growth, which in turn will boost employment, and over time result in higher wages. Break any link of that chain and the middle-class “winnings” end up in someone else’s pocket. [Pols emphasis]…

And so on, and so forth, until the middle class becomes so obscenely wealthy that they have to start lobbying for another round of tax cuts for rich people like them. This theory of “supply side economics,” or as it came to be known in the Reagan era, “trickle-down economics” does not work. We don’t have to speculate about whether or not it could work. It doesn’t. There is plenty of data to prove this. It is (again) no wonder why President Trump’s administration recently suppressed a 2012 report from the Office of Tax Analysis (OTA) that essentially lays bare the fact that this tax proposal would do the exact opposite of what Trump claims would happen.

The NPR story we cited above is an excellent resource for understanding the ins and outs of the Republican tax plan, but it’s a bit of a long read. For an even more briefer-er look, we put together this graphic to help you understand Republican math on healthcare and tax reform. If any of this makes sense to you, then you might be a Member of Congress:

4 Community Comments, Facebook Comments

  1. FrankUnderwood says:

    Ken plus the three Dems. I'm guessing this is not some sort of attempt at bipartisanship. (So Zappy, you can relax.) It's the schism between the deficit hawks and the borrow-and-spend practitioners to voodoo economics.

  2. JohnInDenver says:

    Reuters says:  "The main problem is that the federal government is swimming in red ink with an annual deficit of $550 billion and a national debt — the accumulation of past deficits and interest due to lenders to the U.S. Treasury — exceeding $20 trillion."

    We already know the Republicans want to expand military spending by almost $100 billion over the final Obama budget. Obama recommended an increase; Trump bumped that by an additional 3%; Congress added an additional 5%.

    Thus far, there have been no indications of short term revenue gains from the Trump "plan." Outside groups estimate a loss of $2.4 Trillion over a decade… $240 billion a year.

    So, the 3 Republicans in the majority apparently think

    -($550 billion) -($100 billion) -($240 billion) will somehow be a sustainable government taxation and spending pattern.

    In the real world, that's -($890 billion) — and the Fed is already saying it would be a short term burst, followed by substantial inflation.

    So much for Republicans being the party of fiscal sanity.

  3. doremi says:

    Yesterday, Cory Gardner was interviewed on NPR and saying how great the Tax Reform is as a blueprint.  He emphasized that the idea is for citizens to hold onto their own money and not to "send it to Washington where THEY waste it." 

    Sorry…Cory you are the THEY.  So, you're saying that you and your Republican party (who hold ALL the levers in Washington) are wasting OUR money????

    Yikes…Pogo again…We have met the enemy and it is US  (or the Cory THEY's).

    • RepealAndReplace says:

      Well, they do pay for all those military aircraft used to shuttle cabinet secretaries around instead of making them fly commercial.

      So using Gardner logic, as long as that is continuing – and it will – DC is wasting money so we must cut taxes.

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