November 3, 2017
I sat in on a conference call yesterday with Minority Leader Nancy Pelosi organized by people for the American Way. Topic: the Republican tax proposal. I was grateful for the opportunity, but disappointed in the offering.
The emphasis was on tactics: what can we (Democrats) say in Republican districts to weaken support for and ultimately defeat this tax bill. Of course that’s one thing that should be on Rep. Pelosi’s mind, but I also want to hear a clear message about what we (Americans, all of us) should want in a tax bill. I didn’t hear that framing at all. Instead, I heard snippets of this or that bad feature of the Republican proposal, but no broad framing. What’s the positive, clear framing message?
Here’s my suggestion: We want fair, not fraudulent, tax reform.
The Republicans will say–and are saying–that their tax bill
- will lower taxes for all families
- will be family friendly by expanding child-related tax credits
- will spur economic growth
- will encourage ‘Made in America’ business
- will streamline and simplify the tax code.
There’s a clear framing message there, and we will hear it relentlessly.
The first thing we want to say about this is that it is fraudulent. This tax bill, if approved, will not do any of these things. This tax bill is a tax-cut-for-the-wealthy tax bill. It will not provide meaningful tax relief for middle or lower income families, it will not spur economic growth, and it will not do anything else that Speaker Ryan claims it will. The claims made on behalf of this bill are false. [In a subsequent post, I’ll provide links to evidence-based demonstrations of the fraudulent claims behind this tax proposal.]
Notice, too, that the Republican case for their tax bill says nothing about its effect on the federal deficit. If passed, it would certainly massively increase the deficit.
The other thing we want to say about this bill is that it is unfair, and that what we want (all Americans) is a fairer tax system.
A fairer tax system would put more emphasis on taxing every dollar earned in a similar fashion. A fairer tax system would eliminate loopholes and special provisions that allow the wealthy to pay lower tax rates on some or all of their earnings.
The Republican bill does next to nothing to eliminate current loopholes and adds several others. For example it would not eliminate the carried interest provision, which allows hedge fund managers to enjoy a reduced tax rate on their earnings (and which Trump said he would eliminate), The bill would eliminate the Alternative Minimum Tax, which insures that wealthy pay some taxes even if their use of loopholes and special provisions would otherwise reduce their tax bill to zero. The bill would allow more business income to be treated as pass-through income taxed at a lower rate. The bill would eliminate estate taxes on very wealthy persons (the current tax system already has no taxes on estates valued at less than $5 million). These are all steps toward greater unfairness.
In addition, this tax bill if passed would not promote economic growth. We do not lower taxes to promote economic growth. We are already in the third longest period of expansion of the American economy in history. That’s a legacy (unacknowledged by Republicans) of the Obama presidency. A tax cut for the wealthy now would only serve to worsen the deficit and imperil future economic growth.
What we need is a fairer tax system, one that would would end loopholes and special deals for the wealthy.
Over the summer, Senate Democrats sent a letter to Republicans emphasizing four points about what they would insist upon in any tax bill:
- it would work through regular order,
- it could not raise taxes on the middle class or
- cut taxes for the one percent and
- the reforms couldn’t increase the deficit.
That’s essentially the same framing message. Now I want to hear it voiced, clearly and often, to the American people.
One more thing to insist upon: no tax bill of any sort without first seeing Trump’s tax returns.