Goodies

On July 11, 2012, Mitt Romney, then the Republican Party’s nominee for President of the United States, addressed the NAACP at its annual convention, defending the rich while promising to repeal Obamacare. He was loudly booed. Later that day, before a crowd of supporters in Montana, Romney indicated that perhaps earning the derision of the civil rights organization was entirely planned. After mentioning his earlier speech to the NAACP, Romney proudly stated that, “When I mentioned I am going to get rid of Obamacare they weren’t happy, I didn’t get the same response. That’s ok…but I hope people understand this, your friends who like Obamacare, you remind them of this, if they want more stuff from government tell them to go vote for the other guy – more free stuff. But don’t forget nothing is really free.”

It was a strange point to make about a lengthy attack on a president and his policies in front of his staunchest supporters, a broadside that included poorly received remarks on President Obama’s energy policy. Strange, that is, if you couldn’t hear the shrill dog-whistle to Romney’s white GOP base. Fact is, the Romney 2012 campaign was built on the same racial resentment-economic anxiety interplay that reemerged four years later. Romney’s basic thesis was that the economy was broken for the middle class not because of the unscrupulous rich but because Obama had enabled the takers at the expense of the makers. What followed was Romney’s inane “You Built That” mantra, the selection of government program slasher-villain Paul Ryan as his running mate, and his infamous 47% comments. Even after the election, Romney attributed his defeat to Obama’s promise of “gifts” to African-Americans, Latinos, and young people, a world-view that many commentators on the right were all too happy to adopt.

Though it feels like a lifetime ago, the Romney-Ryan campaign developed the delicate backdrop for Donald Trump’s brutish campaign play. There was Jeb Bush’s answer to a voter’s question about how the GOP could expand black support by immediately returning to racialized welfare queen imagery: “Our message is one of hope and aspiration. It isn’t one of division and get in line and we’ll take care of you with free stuff.” Ted Cruz and Marco Rubio also framed their substantive critique of the Democratic Party around the false paradigm of hard work versus no-strings hand-outs. Is it any wonder that a Republican base primed on such rhetoric for years would turn to the “us versus them” racial demagoguery of Donald Trump?

To those who would condemn this characterization as liberal racism, as part of a pattern to mobilize minorities against Republican bigotry where nothing except ideological commitment to limited government exists, I present to you the Republican tax cut bill signed into law by President Trump on December 22. Rather than truly reform the tax code by eliminating complexity through lowering rates while eliminating deductions, the law hands goodies to corporations and the rich at astonishing rates. The law’s express purpose is to punish the makers in blue states and award the wealthy with limitless “free stuff.”

How do we know that the law is a wholesale giveaway to the rich and connected rather than a large conservative reorganization of national tax policy? Three reasons: first, because the law fails to accomplish any of the Republicans’ purported goals when they first began the effort; second, because the law is larded with specific breaks paid for by eliminating programs and efforts that benefit the poor and middle classes; and third, because Republican lawmakers told us so.

First, the law has no connection to the “reform” Republicans promised. Paul Ryan explicitly promised that the eventual Republican tax plan would lower rates and eliminate deductions, resulting in a simplified tax code that would be deficit neutral while allowing Americans to file their tax returns on a postcard-sized form. This was completely unfeasible from the beginning, since Republicans could never find enough waste and minor deductions to offset the massive tax cuts they wanted to pass. As predicted here in April, this problem meant that “Republicans don’t support tax reform, they support tax cuts. Those tax cuts will disproportionately benefit the wealthy. And when they are enacted without offsetting reductions in the loopholes that litter the tax code, they will also massively increase the deficit.” That’s exactly what’s happened in this legislation, massively reducing taxes on the wealthy while leaving nearly all deductions intact.

Consider the following conclusions of the Tax Policy Center on the law’s effects on individuals:

  • Tax cuts as a percentage of after-tax income would be larger for higher- income groups with the largest cuts as a share of income going to taxpayers in the 95th to 99th percentiles of the income distribution.
  • In 2018, Taxpayers in the top 1 percent of the income distribution (those with income more than $733,000) would receive an average cut of $51,000, or 3.4 percent of after-tax income.
  • Meanwhile, Taxpayers in the bottom quintile (those with income less than $25,000) would see an average tax cut of $60, or 0.4 percent of after-tax income.
  • In 2027, taxes would increase for 53 percent of tax payers compared with current law;

Meanwhile, the law increases the deficit by more than one trillion dollars over the next decade.

Second, we know the law involves a series of hand-outs because individual provisions contradict the purported larger purpose and make sense only as gifts Republicans are giving contributors for Christmas. There are specific giveaways for oil and gas companies, private schools, and wealthy heirs. Most of the long-term benefits of the law go to corporations, including the hefty cut in the corporate tax rate from 35% to 21%. Moreover, the bill contains giveaways intended to win over hold-out senators looking for a personal hand-out. Senator Bob Corker switched to a “yes” on the tax bill after a new provision for real estate LLCs like the ones he owns was added at the last minute. And Senators Ron Johnson and Steve Daines withheld their support until GOP leadership further reduced the tax rate for so-called “pass-through” corporations like the ones that made them rich. The pass-through provision has the added effect of directly benefiting Donald Trump.

And third, we know this is a straight transfer of goodies because Republican lawmakers have told us so. In November, Republican Senator Lindsey Graham warned that “financial contributions will stop” if the GOP failed to pass tax cuts and GOP Congressman Chris Collins admitted that “my donors are basically saying, ‘get it done or don’t ever call me again.’”

The Republican tax cut bill is, in short, a massive give-away to the wealthy. Not a return to free market economics or reprioritizing of federal tax policy. Not a mere ideological divergence from Obamanomics. It is simply the hypocritical quid pro quo Republicans always assign to Democrats — goodies as payback for electoral assistance.

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