GOP Tax Bill Would Set Up Years of Challenges

Expiration dates guarantee any changes would be revisited

Republicans are on the cusp this week of passing a historic overhaul of the U.S. tax system but might also be ushering in a new period of instability in the tax code, because the plan is advancing without bipartisan support and with expiration dates that guarantee it will be revisited for years.
.. One-time revenue sources like a $339 billion tax on stockpiled foreign profits pay for long-running tax cuts, making the bill more costly in the future. Key features—including the $2,000 child tax credit and a $10,000 cap on the state and local deduction—aren’t indexed to inflation, eroding their real value over time.
.. “It’s just the beginning. It’s a whole new chapter,” he said. “It’s built on unstable financial foundations and on unstable political foundations. And it was built in great haste.”
.. “In the short term, the bills are unpopular because the losers scream the loudest,” said Brian Riedl, a senior fellow at the free-market-focused Manhattan Institute. “And in the long term, they are hard to repeal because the beneficiaries are the loudest.”

It would be hard for a future Congress to shrink the new tax bill’s $2,000 child tax credit or the bigger standard deduction, for example.

.. But other pieces—a doubled estate-tax exemption, a new tax break for pass-through business owners, the 21% corporate tax rate, limits on the state and local tax deduction for individuals—are ripe to be reversed or scaled back.

A future Democratic Congress and president could also dial up tax rates on high-income households and businesses.

“Anything that benefits the middle class or low-income families will be made permanent,” Mr. Riedl said. “But anything that benefits exclusively upper-income families is in danger.”

Making some provisions permanent means the bill might be more expensive than advertised in the long run.

The bill cuts taxes by $1.5 trillion over a decade, but 74% of that cost is in the first five years. The true 10-year cost of the Republican policies, without the expirations, would be at least $2 trillion and even more beyond 2027, according to the Committee for a Responsible Federal Budget.

How the Republicans Broke Congress

Republican leaders have been blunt about their motivation: to deliver on their promises to wealthy donors, and down the road, to use the leverage of huge deficits to cut and privatize Medicare and Social Security.

.. the unexpected and rapid nature of the decline in American national politics, and how one-sided its cause.

.. the Republican Party — as an institution, as a movement, as a collection of politicians — that has done unique, extensive and possibly irreparable damage to the American political system.

Even today, many people like to imagine that the damage has all been President Trump’s doing — that he took the Republican Party hostage. But the problem goes much deeper.

.. we can’t help seeing the Republican Party as the root cause of today’s political instability. Three major developments in the party required us to change our view.

.. First, beginning in the 1990s, the Republicans strategically demonized Congress and government more broadly and flouted the norms of lawmaking, fueling a significant decline of trust in government

.. House Republicans showed their colors when they first blocked passage of the Troubled Asset Relief Plan, despite the urgent pleas of their own president, George W. Bush, and the speaker of the House, John Boehner. The seeds of a (largely phony) populist reaction were planted.

.. Second, there was the “Obama effect.”

.. we saw a deliberate Republican strategy to oppose all of his initiatives and frame his attempts to compromise as weak or inauthentic. The Senate under the majority leader Mitch McConnell weaponized the filibuster to obstruct legislation, block judges and upend the policy process. The Obama effect had an ominous twist, an undercurrent of racism that was itself embodied in the “birther” movement led by Donald Trump.

.. repeatedly promised the impossible under divided party government: that if they won, Mr. Obama would be forced to his knees, his policies obliterated and government as we knew it demolished. Their subsequent failures to do so spurred even more rage

.. Third, we have seen the impact of significant changes in the news media, which had a far greater importance on the right than on the left. The development of the modern conservative media echo chamber began with the rise of Rush Limbaugh and talk radio in the late 1980s and ramped up with the birth of Fox News. Matt Drudge, his protégé Andrew Breitbart and Breitbart’s successor Steve Bannon leveraged the power of the internet to espouse their far-right views. And with the advent of social media, we saw the emergence of a radical “alt-right” media ecosystem able to create its own “facts” and build an audience around hostility to the establishment, anti-immigration sentiment and racial resentment. Nothing even close to comparable exists on the left.

Mr. Trump’s election and behavior during his first 10 months in office represent not a break with the past but an extreme acceleration of a process that was long underway in conservative politics.

.. The Republican Party is now rationalizing and enabling Mr. Trump’s autocratic, kleptocratic, dangerous and downright embarrassing behavior in

.. hopes of salvaging key elements of its ideological agenda: cutting taxes for the wealthy (as part of possibly the worst tax bill in American history), hobbling the regulatory regime, gutting core government functions and repealing Obamacare without any reasonable plan to replace it.

.. The failure of Republican members of Congress to resist the anti-democratic behavior of President Trump — including holding not a single hearing on his and his team’s kleptocracy

.. Only conservative intellectuals have acknowledged the bankruptcy of the Republican Party.

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?

Bonfire of the Insanities

Satire, commentary, analysis—throw it all out the window. What’s happening in Washington is beyond parody, beyond fiction. What will happen tomorrow, what will happen in the next hour? No one knows.

.. Trump doesn’t want stability, he wants motion. He isn’t interested in details or arguments, he’s energized by accomplishments, achievements, placards on the wall. He doesn’t have a cabinet, he has employees. And the primary job of those employees is to protect their boss.

.. Which is what Anthony Scaramucci understands. Like Trump, he’s a showman. Larger than life. He’s familiar with grand gestures. He’s not a D.C. guy.

.. So the man whom the voters brought in to disrupt Washington brought in Scaramucci to disrupt his own White House. Well, mission accomplished.

.. I have been reading past issues of National Review, including bound volumes from 1977-1981. I do not know whether Donald Trump fits the historian’s model of a “disjunctive” president like Jimmy Carter, but the two chief executives do share this in common: Both campaigned as outsiders, both brought fellow outsiders with them to Washington, and these coteries of trusted advisers did not mesh with the institutions and personalities and manners they found in the city. In both cases there was a culture clash, apparent from the beginning. It soon became apparent that Carter’s presidency was not only dysfunctional, but a failure.