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“Republicans To Wealthy; We Just Can’t Quit You”: Giving Equal Benefits To Everyone Would Be Ridiculous

Any marginally aware citizen is familiar with what I like to call the Four Pillars of Conservatism: low taxes, small government, strong defense, and traditional values. The simplicity and clarity of these ideas allows any Republican anywhere to move into politics with a ready-made ideological program, and as long as they stay abstract, it’s reasonably popular. It’s only when you start to get into specifics that the agenda becomes problematic.

The trick is that if you’re proposing something unpopular, to speak about it in the most abstract terms possible. “Low taxes” sounds great, because who wouldn’t like to pay less in taxes? The trouble is that what Republicans actually want is to cut taxes for the wealthy. They’re perfectly happy to cut taxes for other people if the opportunity presents itself, but the value of tax cuts for the wealthy is an absolutely foundational belief.

They know, however, that most Americans don’t agree. So when they talk about taxes, they’re supposed to be circumspect and careful, answering questions about tax cuts for the wealthy by saying that tax cuts in general are good for everybody. Which is why it’s so surprising when one of them is candid, as House Ways and Means Committee chairman Kevin Brady was in an interview with John Harwood published today.

Brady, who is in charge of tax policy, just comes out and says that Republicans won’t accept any tax reform that doesn’t include reducing the top income tax rate. All that talk of making the tax code simpler is all well and good, but there’s one thing they will absolutely not compromise on, and that’s the top rate, which is currently paid by those making over $415,000 a year:

HARWOOD: Could you envision a tax reform that you could go along with that had many elements that you liked that did not decrease the top rate?

BRADY: That’d be difficult to accept, because I think that holds back investment, both by businesses, small businesses, and by families.

HARWOOD: Because there are some conservatives who are arguing that in the environment that we’re in now, that conservative tax reformers ought to focus on things other than the top rate.

BRADY: I’d have to disagree, and here’s why. Besides businesses investing, when individuals, after they make that dollar, they have three choices. They can spend it, they can save it, which is good as well, but they can reinvest it back in the economy. And earners, not just high earners, all along the scale do that. I want to encourage families and environments to do more of that. And so on that side of the ledger, let’s look at those pro-growth packages.

There’s a rationale here, which is that when you give rich people more money, they’re more likely to invest it, which helps grow the economy over the long run. But conservatives sell this idea not as a long-term way to sustain investment, but as a short-term strategy to bring prosperity to all. This year, every Republican running for president essentially pledged to bring back George W. Bush’s economic policies. There were differences in the details of their plans, but all of them centered on large tax cuts for the wealthy, and all promised that the effects would be spectacular.

But here on Planet Earth, there is zero real-world evidence that large tax cuts for the wealthy super-charge the economy. If it were true, then Bush would have been the most economically successful president in American history. But he was actually one of the worst, and when it comes to job creation, the last two presidents who raised taxes on the wealthy — Bill Clinton and Barack Obama — were among the best. The economy created 22 million jobs while Clinton was president, and Obama is on pace to see around 16 million new jobs created since the trough of the Great Recession in his first months in office (I discussed this at length here — with charts!).

Meanwhile, media coverage continues to suggest that Paul Ryan represents some kind of sober alternative to the presidential candidates. But he has long advocated slashing the top rate from its current 39.6 percent down to 25 percent, which would represent an enormous giveaway to the wealthy (he says it’ll be paid for by “cutting loopholes,” which are never specified). Just a month ago, Ryan was asked whether he might consider a plan that’s “distributionally neutral,” in other words, one that gives equal benefits to every income group. Here’s what Ryan said:

So I do not like the idea of buying into these distributional tables. What you’re talking about is what we call static distribution. It’s a ridiculous notion. What it presumes is life in the economy is some fixed pie, and it’s not going to change. And it’s really up to government to redistribute the slices more equitably. That is not how the world works. That’s not how life works. You can shrink or expand the economy, and what we want to maximize is economic growth and upward mobility so that everybody can get a bigger slice of the pie.

To translate: Giving equal benefits to everyone would be ridiculous. The only way to expand the economy for all is to shower benefits on the rich. But most people don’t quite understand what Ryan is talking about; all they hear is that he wants more pie for everybody. That’s how you’re supposed to talk about taxes.

And this is the key thing to understand: no matter which Republican ends up being the presidential nominee, cutting taxes for the wealthy will be at the absolute top of the agenda. Even Donald Trump, who has been happy to buck Republican orthodoxy on a variety of issues, issued a tax plan the greatest benefits of which went to the wealthy — just like every other candidate.

In this election, just like in every other election, Democrats will charge that Republicans only want to help the rich. It’s an effective attack, mostly because it’s true. Or to be more generous, Republicans want to help everyone, it’s just that they really want to help the rich, and they see helping the rich as the best way to help everyone else. But it’s possible that the Democratic attack could be particularly potent this year in winning over independents and even a few Republicans. The Republican Party has spent the last year in a brutal argument about their own perfidious elites, who supposedly look with scorn on the masses in their party. And after all that, the centerpiece of their economic plans for the future is still cutting taxes at the top.

When a party advocates something that politically dangerous, it isn’t because they’re stupid. It’s because they believe in it, down the marrow of their bones.

 

By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, April 12, 2016

April 16, 2016 - Posted by | Conservatism, Kevin Brady, Tax Cuts for The Wealthy | , , , , , , ,

1 Comment »

  1. It should be noted Cruz ‘ tax proposal reduces taxes on the rich and upper middle class, while increasing it on the lower class while increasing the deficit by $3.7 trillion over the next ten years. That is about 20% of the entire debt today. Trump’s would increase the debt by $12 trillion or 60% of the debt in the next ten years.

    Like

    Comment by Keith | April 16, 2016 | Reply


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