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The Worst of the GOP, All in One Bill

How tax reform turned into a Frankenstein’s monster of bad Republican ideas

Alex Wong/Getty

On Wednesday, standing in front of a display of Christmas trees in Missouri, President Donald Trump was beaming. Hours after retweeting Islamophobic videos from the hate group Britain First and accusing MSNBC host Joe Scarborough of murder, Trump was happy, calm, comfortable—a rarity in his ten months as president. Grinning from ear to ear, he made his pitch. The tax reform plan moving through Congress, he said, will personally cost him “a fortune.” He added, “I think my accountants are going crazy right now.”

In fact, Trump and his family could personally save as much as $1 billion in taxes under the GOP’s proposals to remake the country’s tax system. His statement was just the latest lie about what the Republican tax plan does and who it benefits—the glowing star on top of a decaying Christmas tree of a bill that has been festooned with every conceivable bad Republican idea of the past decade and more. Legislation that was ostensibly meant to simplify and optimize the tax code has become, in no particular order, a massive corporate tax cut; a massive tax cut for wealthy people; a tax hike for millions of middle-class Americans; a partial repeal of Obamacare; a ticking time bomb for the social safety net, including previously untouchable programs like Medicare; an all-out assault on graduate school education; and sops to the evangelical right, such as recognizing new legal rights for fetuses. “It Started as a Tax Cut,” reads a headline in The New York Times. “Now It Could Change American Life.”

How did this happen? How did a bad bill snowball into a monstrously bad bill that is both wildly unpopular and has a greater chance of passing than any other major legislation the GOP has attempted this year?

This bill has not one, but two original sins. The first, as Vox’s Matt Yglesias wrote earlier this month, is that the corporate tax cut at its center is gargantuan. To meet the stipulations of the Senate’s Byrd rule—which allows budgetary legislation to be passed with a bare majority of votes, as long as it’s revenue-neutral after the first ten years—Republicans have been forced to shift the tax burden onto the middle class, to pilfer national health care and education programs, and to possibly introduce triggers for automatic spending cuts. Basically, the GOP is throwing anything and everything on the chopping block to protect that corporate tax cut, which would lower the rate by fifteen percentage points.

The second original sin is that, in order to please the president and disaffected donors, Republicans decided that they had to pass this bill fast. When tax reform was last undertaken, in 1986, it was done across party lines, and it took a full two years. This time, Republicans essentially shut out Democrats, who theoretically would have tried to shrink the corporate tax cut, boost middle class tax cuts, and keep Obamacare and other federal health care programs out of the legislation altogether. As a result, Republican lawmakers in the Senate, who are set to vote on an enormously complicated bill that was first unveiled less than 30 days ago, will likely not know what exactly they’re voting for. The bill’s amendments have not been made public and likely won’t be until the bill hits the Senate floor.

This plan, in other words, is being driven for entirely cynical reasons. Trump and congressional Republicans are not always aligned, but the stealthy and swift push to enact this legislation ticks off necessary boxes for both camps. Trump is desperate to pass something—despite claiming that he has done more than any other “ten-month president,” he needs a “signature achievement.” Congressional Republicans, meanwhile, are facing a revolt from donors and questions from a base that doesn’t understand why the GOP’s unified control of government has produced next to nothing in terms of legislation. Unsurprisingly, this is not a recipe for good lawmaking.

Every possible justification for this bill is in question. While Republicans say the plan’s lower rates will boost overall economic growth, Trump’s own Treasury Department has reneged on its promise to produce studies that back up that claim. While Republicans say everyone will get a tax break under their bill, independent studies agree that millions of middle-class families will ultimately see a tax hike. While Republicans claim that a corporate tax break will trickle down to workers, there is little evidence to bear this out. The economy is growing and the Dow Jones just cracked 24,000 for the first time in its history—and yet companies aren’t raising wages. There is no reason to believe that they will behave any differently if suddenly presented with a much lower tax rate. Indeed, corporations have indicated that, if the law passes, they will hoard the profits or pay them out to shareholders, instead of raising wages or investing.

The bill’s effect on the deficit has caused some hand-wringing among Republicans, who traditionally rail against deficit growth any time a Democrat is in the Oval Office. There were reports earlier this week that some Republicans were considering a provision that would trigger automatic tax increases if the bill failed to achieve the kind of economic growth Republicans have promised. But that would be too responsible, and was quickly shot down. Instead, the Republicans have turned to their favorite deficit-cutting tool: slashing programs for the needy. Although it’s not yet clear what, if any, deficit “trigger” Republicans will include in the bill, reports on Wednesday indicate that they’ve settled on one that will involve automatic spending cuts, including to programs like Medicare.

As damaging as this bill would be, the outrage has been minimal. As I argued earlier this week, this is partly the media’s fault, which has failed to convey the true depths of what should be a national scandal. But the speed and complexity of this legislation has also quelled the kind of activism that helped kill Obamacare repeal over the summer. No individual aspect of this bill is quite as bad as the nucleus of Republican health care reform: 24 million people losing their health insurance at a stroke. But in aggregate, the tax reform bill is at least as bad. Eleven million people could be uninsured, while premiums spike. Medicare and Medicaid could be made vulnerable to sweeping cuts. More money in the economy will be funneled toward the top. These are serious consequences for a bill that is supposedly about cutting taxes.

And that’s ultimately the issue here. This bill is moving through Congress at a dizzying clip because it’s packaged as a tax cut. Republicans have turned those words into an ideological holy grail, insisting that this overstuffed and undercooked legislation, which will result in profound changes to federal health care and likely other social programs, is about the greater good of cutting taxes. They argue that these cuts will result in wage growth and job creation, even though there is little evidence that they will do anything of the sort. It is quite simply a massive sham.