Any Republican tax bill is bound to be hotly criticized. That’s politics and the mainstream media. We were unprepared, however, for the outpouring of hysterical denunciation we’ve witnessed over the last several days as the GOP tax plan comes closer to final passage.
The New York Times editorial board raged against “this looting of the public purse by corporations and the wealthy.” “Republican leaders’ primary goal,” the Old Gray Lady went on, “is to enrich the country’s elite at the expense of everybody else, including future generations who will end up bearing the cost.” The Washington Post’s E.J. Dionne called it “one of the most scandalous special-interest tax bills in a long history of such measures.”
Republicans, thinks Neera Tanden of the Center for American Progress, are “rejecting the idea that they must exhibit responsibility in leading our government and are instead embracing a reckless agenda which threatens America’s long-term economic security and budget priorities.” Tanden called the bill “shameful,” evidence of “staggering hypocrisy,” and the manifestation of a “radical agenda.” Former Treasury secretary Larry Summers, remarking on the bill’s elimination of Obamacare’s insurance mandate, says it will will result in the deaths of 10,000 people.
Please. This isn’t a putsch or a declaration of war. It’s just a tax bill.
While it’s far from the historic triumph Republican leaders would like to claim, it’s a generally sound reform that deserves to be passed. The House and Senate have passed similar versions of the bill, and it now awaits reconciliation by a conference committee. Both versions dramatically lower the corporate tax rate, modestly lower individual rates, and eliminate some (though too few) deductions and credits. The Senate bill also eliminates Obamacare’s insurance mandate.
Taken together, these measures are defensible expressions of traditional free-market conservatism. If passed into law they will encourage economic growth. How much is a debatable question, but we’re confident that they’ll benefit the economy far more than the Democrats’ preferred means of dumping cash into state and local governments (recall the $830 billion stimulus bill of 2009). It’s true that the bill will add to the deficit in the short term. Unfortunately, however, the nation’s economy hasn’t been able to exceed an abysmal 2 or 3 percent growth for the last decade, and there is little hope of dealing with the deficit at that rate. As for the Joint Committee on Taxation’s claim that the tax cut will increase growth by only 1 percent over 10 years, we are skeptical that any collection of bureaucrats and academics has the slightest clue what growth will look like a decade from now.
We’re glad to learn, however, that so many Democrats and progressive commentators have suddenly grasped the importance of deficit and debt reduction. Presumably we can count on them to join us in urging both parties to deal with a problem that’s a far greater threat than any single revenue bill: entitlement spending.
Some of the most frequently reviled provisions in the bill, moreover, are both reasonable and defensible. The elimination of the deduction for payment of state and local taxes will hurt some middle-income taxpayers in states such as California and New York, but the blame for that should reside with those states’ lawmakers for keeping taxes punishingly high. The House version eliminates the deduction for student loan interest payments, but the only substantive argument for preserving that deduction is that it exists already and taking it away would make it (slightly) harder for students to pay back loans. Business groups and corporations, similarly, are angry that the Senate eliminated a research and development tax credit. But they are angry because they’re accustomed to taking advantage of the credit, not because they think such a market-distorting tax break is a good idea on its merits. It isn’t.
The sheer ferociousness of the opposition to this reform has more to do with Democrats’ hatred for Donald Trump—and with our antipathetic politics generally—than with anything in the legislation itself. There’s no hope of persuading a single Democrat to support the measure, but we wonder if we could prevail on our progressive friends to take it easy on the apocalyptic rhetoric.
