Round Two of Republican Incompetence and Humiliation? Welcome to Tax Reform

by Hunter –

Fresh off their humiliating display of incompetent healthcare “reform” (by which they meant a tax cut for rich people), Donald Trump and the Republican Party alike are moving on to their next big agenda item: tax reform. This will also consist of a tax cut for rich people. And like the attempt to strip health insurance from millions, this too is shaping up to be a fiasco of their own making.

The problem, in short, is that Actual Tax Reform is hard. Very hard. And since nobody in the Republican Party is interested in doing a decent job of it, by which we mean taking suggestions from the opposition party as to reforms that both sides agree are needed, they’ll be seeking to pass “tax reform” legislation through reconciliation, an avenue that lets them dodge a Democratic filibuster in the Senate.

That requires, according to reconciliation rules, that the bill be “revenue-neutral,” adding nothing to the long-term deficit.

Which means that if they want to cut taxes on rich people, they’re going to have to somehow pay for it with service cuts or tax increases on everyone else.

Which means once again, they’re probably boned. Not only do they not have the tax cuts that their Obamacare repeal was supposed to deliver—they’ll have to devise those all over again, if they still want them—but the other possible avenues of funding this monstrosity are probably going to be just as unpopular as their repeal effort has been.

Republicans were already having trouble coming up with ways to pay for their tax cuts, but now they need to come up with $1 trillion more — and maybe $2 trillion. Why is that? Well, their “border-adjustment tax” (BAT) that was supposed to raise $1 trillion in new revenue didn’t take long to go from political gambit to political albatross. And it isn’t hard to see why. It would start taxing everything that American companies import, which is just another way of saying that every company that depends on imports, including big GOP donors like Koch Industries and Walmart, will be as opposed to it as can be. Senator Tom Cotton, who’s from Walmart’s home state of Arkansas, has gone as far as calling the BAT something “so stupid only an intellectual could believe” it — and he’s a Republican!

That’s right, the next big Trump-Ryan Republican idea is a $1 trillion tax on the imports that every single American buys. Even if Republican megadonors who would be gouged by those taxes were somehow convinced to sit this one out, “Republicans want to raise the price of nearly everything you buy” is a dead-fish plan from the start.

The same could be said for every other proposal that’s been floating around Republican circles: When your required endpoint is that rich people pay less taxes, the only way to make that happen is to (1) increase taxes on everybody else or (2) cut government programs, and lots of them, and deeply. That’s what Trump’s proto-budget attempted to do, and the result was so draconian that few Republicans were willing to publicly associate themselves with it.

As a result, Republican infighting has already begun. The divide isn’t, however, about how much to screw the American public and how they can get away with it; the divide is that the fiscal hawk Republicans want to indeed keep the citizen-screwing revenue neutral, while the same hardliners that refused to go along with an Obamacare repeal are now opining that Republicans shouldn’t even bother with that, but should just make the tax cuts they want to make and let the deficit explode.

Due to the details of reconciliation, there’s only one way to do that. You make the tax cuts, but say they’re going to expire after 10 years. This means they won’t add to the deficit after 10 years, which means reconciliation rules still apply, and then before those 10 years are up you pull a George W. Bush and demand they now be made permanent on somebody else’s votes and dime.

It’s going to be a wreck, either way. And like their Obamacare repeal, it’s not clear they can pass anything. The only thing that’s clear is that it’s absolutely, positively guaranteed to be another Republican war.

 

Reprinted with permission from Daily Kos