“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
“Elections Have Consequences”: Don’t Let Anyone Tell You Otherwise
You have to be seriously geeky to get excited when the Internal Revenue Service releases a new batch of statistics. Well, I’m a big geek; like quite a few other people who work on policy issues, I was eagerly awaiting the I.R.S.’s tax tables for 2013, which were released last week.
And what these tables show is that elections really do have consequences.
You might think that this is obvious. But on the left, in particular, there are some people who, disappointed by the limits of what President Obama has accomplished, minimize the differences between the parties. Whoever the next president is, they assert — or at least, whoever it is if it’s not Bernie Sanders — things will remain pretty much the same, with the wealthy continuing to dominate the scene. And it’s true that if you were expecting Mr. Obama to preside over a complete transformation of America’s political and economic scene, what he’s actually achieved can seem like a big letdown.
But the truth is that Mr. Obama’s election in 2008 and re-election in 2012 had some real, quantifiable consequences. Which brings me to those I.R.S. tables.
For one of the important consequences of the 2012 election was that Mr. Obama was able to go through with a significant rise in taxes on high incomes. Partly this was achieved by allowing the upper end of the Bush tax cuts to expire; there were also new taxes on high incomes passed along with the Affordable Care Act, a.k.a. Obamacare.
If Mitt Romney had won, we can be sure that Republicans would have found a way to prevent these tax hikes. And we can now see what happened because he didn’t. According to the new tables, the average income tax rate for 99 percent of Americans barely changed from 2012 to 2013, but the tax rate for the top 1 percent rose by more than four percentage points. The tax rise was even bigger for very high incomes: 6.5 percentage points for the top 0.01 percent.
These numbers aren’t enough to give us a full picture of taxes at the top, which requires taking account of other taxes, especially taxes on corporate profits that indirectly affect the income of stockholders. But the available numbers are consistent with Congressional Budget Office projections of the effects of the 2013 tax increases — projections which said that the effective federal tax rate on the 1 percent would rise roughly back to its pre-Reagan level. No, really: for top incomes, Mr. Obama has effectively rolled back not just the Bush tax cuts but Ronald Reagan’s as well.
The point, of course, was not to punish the rich but to raise money for progressive priorities, and while the 2013 tax hike wasn’t gigantic, it was significant. Those higher rates on the 1 percent correspond to about $70 billion a year in revenue. This happens to be in the same ballpark as both food stamps and budget office estimates of this year’s net outlays on Obamacare. So we’re not talking about something trivial.
Speaking of Obamacare, that’s another thing Republicans would surely have killed if 2012 had gone the other way. Instead, the program went into effect at the beginning of 2014. And the effect on health care has been huge: according to estimates from the Centers for Disease Control and Prevention, the number of uninsured Americans fell 17 million between 2012 and the first half of 2015, with further declines most likely ahead.
So the 2012 election had major consequences. America would look very different today if it had gone the other way.
Now, to be fair, some widely predicted consequences of Mr. Obama’s re-election — predicted by his opponents — didn’t happen. Gasoline prices didn’t soar. Stocks didn’t plunge. The economy didn’t collapse — in fact, the U.S. economy has now added more than twice as many private-sector jobs under Mr. Obama as it did over the same period of the George W. Bush administration, and the unemployment rate is a full point lower than the rate Mr. Romney promised to achieve by the end of 2016.
In other words, the 2012 election didn’t just allow progressives to achieve some important goals. It also gave them an opportunity to show that achieving these goals is feasible. No, asking the rich to pay somewhat more in taxes while helping the less fortunate won’t destroy the economy.
So now we’re heading for another presidential election. And once again the stakes are high. Whoever the Republicans nominate will be committed to destroying Obamacare and slashing taxes on the wealthy — in fact, the current G.O.P. tax-cut plans make the Bush cuts look puny. Whoever the Democrats nominate will, first and foremost, be committed to defending the achievements of the past seven years.
The bottom line is that presidential elections matter, a lot, even if the people on the ballot aren’t as fiery as you might like. Don’t let anyone tell you otherwise.
By: Paul Krugman, Op-Ed Columnist; Opinion Pages, The Conscience of a Liberal, The New York Times, January 4, 2015
“Doubling Down On W”: Determined To Take What Didn’t Work From 2001 To 2008 And Do It Again, In A More Extreme Form
2015 was, of course, the year of Donald Trump, whose rise has inspired horror among establishment Republicans and, let’s face it, glee — call it Trumpenfreude — among many Democrats. But Trumpism has in one way worked to the G.O.P. establishment’s advantage: it has distracted pundits and the press from the hard right turn even conventional Republican candidates have taken, a turn whose radicalism would have seemed implausible not long ago.
After all, you might have expected the debacle of George W. Bush’s presidency — a debacle not just for the nation, but for the Republican Party, which saw Democrats both take the White House and achieve some major parts of their agenda — to inspire some reconsideration of W-type policies. What we’ve seen instead is a doubling down, a determination to take whatever didn’t work from 2001 to 2008 and do it again, in a more extreme form.
Start with the example that’s easiest to quantify, tax cuts.
Big tax cuts tilted toward the wealthy were the Bush administration’s signature domestic policy. They were sold at the time as fiscally responsible, a matter of giving back part of the budget surplus America was running when W took office. (Alan Greenspan infamously argued that tax cuts were needed to avoid paying off federal debt too fast.) Since then, however, over-the-top warnings about the evils of debt and deficits have become a routine part of Republican rhetoric; and even conservatives occasionally admit that soaring inequality is a problem.
Moreover, it’s harder than ever to claim that tax cuts are the key to prosperity. At this point the private sector has added more than twice as many jobs under President Obama as it did over the corresponding period under W, a period that doesn’t include the Great Recession.
You might think, then, that Bush-style tax cuts would be out of favor. In fact, however, establishment candidates like Marco Rubio and Jeb Bush are proposing much bigger tax cuts than W ever did. And independent analysis of Jeb’s proposal shows that it’s even more tilted toward the wealthy than anything his brother did.
What about other economic policies? The Bush administration’s determination to dismantle any restraints on banks — at one staged event, a top official used a chain saw on stacks of regulations — looks remarkably bad in retrospect. But conservatives have bought into the thoroughly debunked narrative that government somehow caused the Great Recession, and all of the Republican candidates have declared their determination to repeal Dodd-Frank, the fairly modest set of regulations imposed after the financial crisis.
The only real move away from W-era economic ideology has been on monetary policy, and it has been a move toward right-wing fantasyland. True, Ted Cruz is alone among the top contenders in calling explicitly for a return to the gold standard — you could say that he wants to Cruzify mankind upon a cross of gold. (Sorry.) But where the Bush administration once endorsed “aggressive monetary policy” to fight recessions, these days hostility toward the Fed’s efforts to help the economy is G.O.P. orthodoxy, even though the right’s warnings about imminent inflation have been wrong again and again.
Last but not least, there’s foreign policy. You might have imagined that the story of the Iraq war, where we were not, in fact, welcomed as liberators, where a vast expenditure of blood and treasure left the Middle East less stable than before, would inspire some caution about military force as the policy of first resort. Yet swagger-and-bomb posturing is more or less universal among the leading candidates. And let’s not forget that back when Jeb Bush was considered the front-runner, he assembled a foreign-policy team literally dominated by the architects of debacle in Iraq.
The point is that while the mainstream contenders may have better manners than Mr. Trump or the widely loathed Mr. Cruz, when you get to substance it becomes clear that all of them are frighteningly radical, and that none of them seem to have learned anything from past disasters.
Why does this matter? Right now conventional wisdom, as captured by the bookies and the betting markets, suggests even or better-than-even odds that Mr. Trump or Mr. Cruz will be the nominee, in which case everyone will be aware of the candidate’s extremism. But there’s still a substantial chance that the outsiders will falter and someone less obviously out there — probably Mr. Rubio — will end up on top.
And if this happens, it will be important to realize that not being Donald Trump doesn’t make someone a moderate, or even halfway reasonable. The truth is that there are no moderates in the Republican primary, and being reasonable appears to be a disqualifying characteristic for anyone seeking the party’s nod.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 29, 2015
“Why The GOP Is The True Party Of ‘Free Stuff'”: Bush’s Logrolling Directs Almost All The Benefits To People Who Don’t Need It
While other candidates are a lot crazier, Jeb Bush is clearly the most fumble-brained option in the presidential race. He can’t seem to string two words together without committing a grievous political faux pas. Whether it was his call for “phasing out” Medicare, or his scorn for women’s health issues, or his claim that Asians are the real anchor babies, he’s got a serious case of foot-in-mouth disease.
Now he’s out with a fresh clunker, this time about how Republicans, unlike Democrats, won’t try to lure black voters with “free stuff.” Primary voting is months away, and already Bush is flirting with language that may have lost Mitt Romney the election.
Bush’s argument — that Democrats cynically use welfare to buy black votes and thereby trap them in a cycle of dependency — is seriously mistaken, as well as deeply hypocritical. But a more fundamental mistake is the picture of government Bush envisions. Put simply, handing out “free stuff” of one sort or another is perhaps the most important job governments can do.
First, let’s tackle why black people vote Democratic. I think the answer can be illustrated best in two words: Strom Thurmond. He was a South Carolina Democrat when he broke the record for the longest Senate filibuster ever trying to stop the 1957 Civil Rights Act. But after a much more aggressive civil rights bill passed in 1964, he switched parties, eventually followed by most of the other Dixiecrats. As Philip Bump demonstrates, blacks unsurprisingly did the opposite at the same time, shifting very heavily towards the Democratic Party.
In other words, government benefits play, at best, an incidental role in black support for the Democrats. Republicans today are not segregationists, but they are the inheritors of a legacy of outright white supremacy. Thurmond was in the Senate until 2003. At his 100th birthday party in 2002, then-Senate Majority Leader Trent Lott (R-Miss.) praised Thurmond’s 1948 run for president under a third party apartheid ticket. (Lott later resigned as leader after his comments were made public.) Democrats have not been the finest stewards of black fortunes, but it’s pretty obvious that they’re better than the alternative.
That brings me to the hypocrisy. While Democrats support social benefits in a wishy-washy way, conservatives are absolutely obsessed with directing huge monetary benefits to their favored constituencies — namely, the rich.
George W. Bush’s tax cuts were violently skewed towards the wealthy — over 73 percent of the benefits went to the top income quintile, and fully 30 percent to 1 percenters alone. Jeb Bush aims to pull the same trick, proposing another corpulent set of tax breaks — only this time, over half of the benefits would accrue to the top 1 percent alone. You can’t win an election solely with the support of billionaires, of course, but Bush and his allies have also already raised over $120 million. Not, one suspects, a coincidence.
Overall, welfare benefits for the top income quintile — largely a result of conservative policymaking — cost roughly $355 billion yearly. Meanwhile, what passes for new policy in Republican circles — a child tax credit — is a government benefit for middle- and upper-class parents that carefully and deliberately excludes the poor.
But it would be a mistake to stop here. Good government types often rail against the blatant cronyism of Bush family politics — i.e., you give me hundreds of millions of dollars for my presidential campaign, and I’ll cut the capital gains tax so you can better loot your company — but making good policy isn’t as simple as being against patronage in general. As Francis Fukuyama points out in Political Order and Political Decay, Boss Tweed-style patronage politics can also be a first step towards an efficient, decent modern state. There is no bright line between handing out jobs to one’s ethnic community in return for votes, and constructing a modern bureaucracy that provides universal social benefits like clean air and water, low crime, a safety net, and so forth.
For what are governments good for, if not providing universal security and prosperity for as many citizens as possible? Even in a jalopy country like the U.S., the vast majority of state activity is dedicated towards this end, at least ostensibly. The military, to defend the nation; Social Security, to provide for the retired and disabled; Medicare, Medicaid, and ObamaCare, to provide universal access to health care; various safety net programs like food stamps and the Earned Income Tax Credit, to keep people from destitution — these together, plus interest on the national debt, account for 84 percent of direct federal spending. Many of these could be improved, or are badly misused, but that’s their bedrock ideological justification. Other nations with better versions of similar policies show that universal high-quality health care and an end to poverty are easily within our grasp.
So the problem with Bush’s logrolling — and Republican policy in general — is mainly that it directs almost all the benefits to people who don’t need it.
By: Ryan Cooper, The Week, September 28, 2015
“GOP Struggles With Phony Deficit Pretense”: Literally The Same People Who Ignored The Deficit In The Previous Decade
The perception of the Republican Party as the anti-deficit party used to be 100% true. A couple of generations ago, the GOP actually saw the deficit as a legitimate concern, and shaped their policy agenda accordingly. During the Eisenhower era, Republicans kept very high tax rates in place, first approved to pay for WWII, in the name of fiscal conservativism. Many Republicans balked at JFK’s tax breaks out of fear of higher deficits.
Obviously, those eras are long gone. The GOP’s shift began in earnest under Reagan, but became almost ridiculous under George W. Bush – an era in which Republicans put the cost of two wars, a Wall Street bailout, massive tax cuts, and Medicare expansion on the national charge card for some future generation to worry about.
But once the Obama era began, GOP leaders decided they cared about the deficit again. It was impossible to take seriously – we’re talking about literally the same people who ignored the deficit in the previous decade – but Republicans actively pretended they had both credibility and genuine concerns about budget shortfalls.
It’s hard not to notice, however, that much of the new congressional Republican agenda has a common thread. See if you notice what these measures have in common. On health care:
A Republican bill to change how Obamacare defines a full work-week would raise the deficit by $53.2 billion over the next decade.
And abortion:
The official budget scorekeeper of Congress says the Pain-Capable Unborn Child Protection Act, which would ban abortions after 20 weeks, would increase Medicaid costs by as much as $400 million…. CBO officially estimates that the bill increases federal deficits by $75 million between 2014 and 2018, and $225 million between 2014 and 2023.
And immigration:
Senate Democrats threatened Thursday to block action on legislation funding the Homeland Security Department until Republicans jettison House-passed provisions that reverse President Barack Obama’s key immigration policies…. The Congressional Budget Office estimates that the measure would increase the federal deficit by $7.5 billion over a decade.
How would Republicans prevent these proposals from increasing the deficit? With offsetting cuts? Higher taxes? Neither, actually – GOP lawmakers are content to approve their priorities regardless of the impact on the budget shortfall.
It seems about once a week or so, GOP lawmakers unveil some new priority, they learn their idea would make the deficit worse, and they quietly make clear they couldn’t care less.
All of which made it quite amusing to see Republicans complaining about President Obama’s upcoming budget plan, claiming that it – you guessed it – doesn’t go far enough to reduce the deficit that Republicans created in the Bush/Cheney era.
Danny Vinik is absolutely right:
Republicans shouldn’t be allowed to get away with this two-faced policymaking. If they care about the deficit, they have to care about it in all contexts. If not, then they shouldn’t justify their opposition to Obama’s policies on grounds that they increase the deficit. When Republican congressmen react to Obama’s budget and undoubtedly invoke the deficit, the media should ask them why they didn’t care about the deficit last year. Maybe there will be some accountability for a change.
Well, there certainly should be some accountability for a change, but Republicans seem awfully confident that that they’ll face no consequences whatsoever for their incoherent whining about the deficit. Given recent history and misplaced public perceptions, I suspect their expectations are probably correct.
By: Steve Benen, The Maddow Blog, January 29, 2015
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