Right now the public hates, hates, hates the tax bill. It’s less popular than any major piece of legislation of the past several decades, less popular even than tax hikes passed under Presidents Bill Clinton and George H.W. Bush. Only about a third of Americans view it favorably, based on an average of nine polls this month.
.. To the extent they care about the system, they’re primarily mad that others are shirking this duty.
- .. The thing that bothers Americans most about the tax system is “the feeling that some corporations don’t pay their fair share,” according to a recent Pew Research Center poll.
- This was followed by the feeling that “some wealthy people are not paying their fair share.”
- Next, tax-code complexity.
- .. Then, in fourth place, was the amount they personally pay in taxes.
.. “Newspapers are going to be full of stories about people creatively minimizing their taxes,” says tax historian Joseph Thorndike.
The Germans Are Impressed
In the ZEW model, U.S. firms needed a return of around 7.6% for an investment to be profitable under pre-reform tax law, compared to an EU average of 6%, and 5.7% in low-tax Ireland.
.. Call it the Get Germany to Pay for American Jobs Act. Don’t be surprised if Germany, France and other high-tax countries follow the U.S. down the corporate Laffer Curve.
Republicans Despise the Working Class
You can always count on Republicans to do two things: try to cut taxes for the rich and try to weaken the safety net for the poor and the middle class.
.. G.O.P. legislative proposals show not a hint of the populism Trump espoused on the campaign trail.
.. their bill — on which we don’t have full details, but whose shape is clear — hugely privileges owners, whether of businesses or of financial assets, over those who simply work for a living.
.. Republicans exalt “job creators,” that is, people who own businesses directly or indirectly via their stockholdings. Meanwhile, they show implicit contempt for mere employees.
.. the consensus among tax economists is that most of the break will accrue to shareholders as opposed to workers. So it’s mainly a tax cut for investors, not people who work for a living.
.. The bill would reduce taxes on business owners, on average, about three times as much as it would reduce taxes on those whose primary source of income is wages or salaries. For highly paid workers, the gap would be even wider, as much as 10 to one... a real estate development firm might get a far bigger tax cut than a surgeon employed by a hospital, even though their income is the same.”(Yes, a lot of the bill looks as if it were specifically designed to benefit the Trump family.).. We’re pitting hastily devised legislation, drafted without hearings over the course of just a few days, against the cleverest lawyers and accountants money can buy. Which side do you think will win?.. it’s a good guess that the bill will increase the budget deficit far more than currently projected... Cutting corporate taxes is hugely unpopular; even Republicans are almost as likely to say they should be raised as to say they should be lowered... Their disdain for ordinary working Americans as opposed to investors, heirs, and business owners runs so deep that they can’t contain it... in 2012, when Eric Cantor — then the House majority leader — tried to celebrate Labor Day. He put out a tweet for the occasion that somehow failed to mention workers at all, instead praising those who have “built a business and earned their own success.”.. Cantor, a creature of the G.O.P. establishment if ever there was one, had so little respect for working Americans that he forgot to include them in a Labor Day message.And now that disdain has been translated into legislation, in the form of a bill that treats anyone who works for someone else — that is, the vast majority of Americans — as a second-class citizen.
The Downward Spiral
But Republicans ought not spend too much time savoring that irony. In their tax bill, they have repeated virtually all of the major procedural sins of the Affordable Care Act: the lack of regular order, the reliance on ridiculous budgeting shenanigans, the “we have to pass the bill in order to find out what’s in it” approach to lining up votes behind legislation nobody had read, which was still being amended well into the evening — “under cover of darkness,” as they like to say in Washington — sometimes with notes scribbled in the margins. And, of course, the tax bill was passed on a party-line vote, or near to it
.. The Affordable Care Act began coming undone the second it was signed; this tax plan, created in much the same way, may very well suffer the same fate. Whatever the corporate tax rate is when Trump signs the tax bill, it is unlikely that it will stay there for very long if Democrats come back into the majority in Congress. And who believes that Republican congressional majorities are destined to be eternal?