Professional Staff Congress President Barbara Bowen said during a union rally Dec. 19 that the tax plan produced by Republican leaders in Congress in tandem with President Trump amounted to “a war on working people, sick people, young people, people of color, New York City, New York State…”
A strong case could be made on every count of her rhetorical indictment. But it might be even more apt to describe what happened as a coup, engineered by a political party that is both in thrall to and operates in fear of its wealthy backers.
The Republican response when it’s pointed out that the bill moved through both houses of Congress without a single Democratic vote is that the opposite was true in the passage of the Affordable Care Act seven years ago at President Barack Obama’s behest. The prime difference is that the ACA was approved after extensive hearings and debate on its contents. Republican leaders in Congress pushed through the components of a tax plan that is overwhelmingly freighted to benefit large corporations and the wealthiest individuals without a single hearing, and through much of the process kept the contents secret from many of their own members.
That’s what you do when you know that legislation won’t stand up under close scrutiny because it is so blatantly tilted to favor some interests and, in this case, states that supported Mr. Trump and the GOP in last year’s election, while simultaneously punishing those who live in states that went strongly for Hillary Clinton.
The blame for this does not fall entirely on Mr. Trump, although there are key items in the soon-to-be-enacted measure that particularly benefit him and his family. To a large degree, his role here was similar to the one he played in recent years on many large building projects: lending his name to somebody else’s creation. This is the kind of tax plan that Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan long have advocated, only to be brought up short by Mr. Obama and his sense of both fiscal responsibility and fairness. Both those concepts are foreign to Mr. Trump and have been for his entire career as a businessman, and so there was no one to place a check on the excesses, notwithstanding polls showing that a majority of Americans oppose the changes and believe they won’t personally benefit from them.
There are two reasons that didn’t matter to GOP leaders. They were afraid that after bungling through most of the first year in this decade in which they controlled the White House and both houses of Congress, key donors would stop contributing to them if they didn’t get sizable tax breaks. And they are also cynical enough to believe that enough of their base voters will rally to them once they start receiving more money in their paychecks due to the tax cuts, even if it is a drop in the bucket compared to what’s being done on behalf of corporations and the wealthiest Americans, and will add $1.5 trillion to the deficit.
That cynicism is counting on enough people ignoring the fact that the corporate tax cuts are permanent while the individual income-tax cuts are due to expire after 2025, which according to two nonpartisan tax groups means that by 2027, a majority of Americans will find that their taxes have risen, and that the hike will fall particularly hard on those making less than $75,000 a year.
While Mr. Trump in particular, in a continuation of his obsession to wipe out the positive accomplishments of his predecessor, crowed about a portion of the plan that eliminates the individual mandate of the ACA requiring those who don’t have health coverage from some other source to pay for it themselves, that change won’t take effect until Jan. 1, 2019. Not coincidentally, that means the negative consequences of that elimination, including a rise in health-care premiums for those who remain enrolled while younger, healthier people opt out once the mandate is gone, won’t be felt until after next November’s midterm congressional elections.
The impact will be felt particularly in New York, New Jersey and Connecticut, because among the changes is a sharp limit on the amount of state and local income taxes that will be deductible. E.J. McMahon, the respected research director at the conservative Empire Center for Public Policy, made the argument last week that while many New Yorkers won’t feel the pinch because of other changes in the tax system under the bill, the state as a whole will suffer a serious blow due to its dependence on income-tax payments from high-earners.
But that by itself is problematic, for both the state’s treasury and public employees who provide services through judicious use of tax dollars. This will be particularly true if large numbers of wealthy New Yorkers look to duck the loss of deductibility by changing their legal residences, which can be done simply by spending more than half the year living in a state like Florida that does not impose its own income tax. And what happens at the state level will affect city government as well.
The best hope of countering the coup is to mobilize all those hurt by this bit of Robin Hood in Reverse to offer a ringing rebuttal in next year’s elections.