Steep, sloppy tax cuts don’t pay for themselves, as Americans should have learned during the George W. Bush years.
Would someone kindly replace Nancy Pelosi as a spokesperson for Democrats? The House minority leader’s riff on the tax bill as “crumbs” for average Americans bombed on two fronts. One was her snide and preachy tone. The other was linking “crumbs” to $1,000-or-better bonuses that a few companies said they will distribute out of their tax savings.
Not that Pelosi was entirely wrong. House Speaker Paul Ryan rescued her with his tweet about a woman doing back flips over a tax cut amounting to $1.50 a week.
“A secretary at a public high school in Lancaster, PA, said she was pleasantly surprised her pay went up $1.50 a week,” he posted on Twitter. “She said (that) will more than cover her Costco membership for the year.”
Ryan was widely mocked for showcasing such paltry savings as an example of Republican beneficence in the recently passed law. He wisely deleted the tweet.
As a longtime member of Costco in good standing, I can attest that $1.50 a week will indeed pay for the year, plus most of a bag of Kirkland Signature pecan halves. But for those who live above subsistence level, that’s not exactly winning the lottery.
And the tax law seems even less of a deal when you consider that it will dump nearly $1 trillion in new U.S. government debt onto the shoulders of American taxpayers. That’s just for this year. We’re talking an 84 percent(!) leap in government borrowing over 2017.
And yes, the Congressional Budget Office came up with that percentage after factoring in the economic growth the tax cuts are expected to produce. Clearly, steep, sloppy tax cuts don’t pay for themselves, as Americans should have learned during the George W. Bush years.
Lowering the corporate tax rate was the one sensible part of the law. U.S. corporate tax rates were quite high by international standards. Smart Democrats, Barack Obama included, had long been pushing for corporate-tax reform.
The big flaw was the money grab. The top 0.1 percent of earners — those taking home something north of $3.5 million — will, by 2027, enjoy an average tax cut of $182,030 a year. That’s enough to buy the whole pecan farm. And at a time of soaring debt, bestowing princely tax cuts on those already getting richer faster than everyone else would seem highly irresponsible.
Meanwhile, a large group of middle-income Americans is not getting even crummy tax cuts. Rather, it is facing tax hikes. That’s because the tax law sharply curbs deductions for state and local taxes. This hits many residents of high-income, high-tax states right in the kisser.
Republican lawmakers undoubtedly thought themselves quite clever by sticking it to taxpayers in generally Democratic-voting states. The problem with such reasoning is that these Democratic states send enough Republicans to Washington to preserve the GOP majority. Many of the stuckees are the very blue state people who do vote Republican — or rather, used to vote Republican.
As for Walmart’s $1,000 bonuses, they go only to employees who’ve been with the company for 20 years. At the same time, Walmart hiked wages not as charity but to retain workers in a tight labor market.
The partisan portrayals of the tax law have left us with two unattractive visuals. One is Pelosi leaving the impression that she wouldn’t bend down to pick up a $50 bill. The other is Ryan expecting the peasantry to do cartwheels over $1.50 a week.
But those are just the optics. On policy, there will be no false equivalency here. This abomination of a tax law is solely the handiwork of Ryan and associated Republicans. It will end in tears.