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Posted by on Nov 21, 2017 in Politics | 0 comments

Frum: GOP Blowing Tax Reform

David Frum points out the latest example (tax reform) of Republicans’ inabilty to govern in The Atlantic.

From the point of view of future U.S. growth and prosperity, the broad outline of tax reform seems obvious. Lower corporate rates to somewhere between 25 and 30 percent, the developed-world norm. Tighten collection so that the rate is actually paid. This is one reform that should come near to paying for itself, since collections from the present loopholed system have shrunk to such relatively low levels. Make up any difference by raising other, underperforming taxes, especially excise taxes; while collections from the individual income tax have doubled since 1997, receipts from the federal excise tax on alcohol have risen only by one-third over the same period.

Those are changes that could command broad assent. The present Republican plan to use the manifest need for corporate tax reform to shift the burden of the individual income tax from the wealthiest to middle-income families in blue states will not.

Congressional Republicans well appreciate the unpopularity of what they are doing. That’s why they are short-circuiting the traditional legislative process, bypassing hearings and other opportunities for public comment. The more the public knows, the more jeopardized their plan becomes. Since the Great Recession, the GOP has grown both more extreme in its goals and more radical in its methods. Apocalyptically pessimistic in its view of America’s future, it seems determined to seize for its donors and core constituencies as much as it can, as fast as it can, as ruthlessly as it can. It will then take advantage of the U.S. political system’s notorious antimajoritarian bias in favor of the status quo to defend the grab over the coming years and decades. Repeal and replace failed. The new slogan is: Rush, grab, entrench, and defend.

Despair is always a bad counselor. This hubris and haste will not deliver the results that U.S. businesses want and that the American public should expect. A normal Republican president would say so. A normal Republican president would enlarge the narrow views of his congressional party—if only to win a second term for himself, but ideally because presidents by their job definition are compelled to think of the wider interests of the nation. But President Trump, elevated by the Electoral College on the basis of a Michael Dukakis–size share of the popular vote, is not only the least public-spirited president in U.S. history, but also the most ignorant and shortsighted. He struck an implicit deal with the congressional Republicans during the campaign of 2016: If they would shield his wrongdoing, he would sign their bills. It’s the one of the rare commitments in his lifetime on which he has not (yet) reneged.

An opportunity to achieve a sensible improvement by broad consensus is being flung away in favor of accumulating special favors for “special” people. If it succeeds, it will not last. And it probably will not succeed. The differences between the House and the Senate are real; settling them will take time.

Some Republicans may reason, as Paul Krugman tweeted on Thursday, “You might think that growing evidence that 2018 will be a Dem wave would make some Rs break ranks. But here’s the thing: Probably many of those Rs figure that they’ll be wiped out regardless … So if you’re, say, a GOP Congressman from a well-educated, affluent CA district, you might look at VA results and say, ‘Well, by 2019 I’ll be outta here and working as a a lobbyist on K Street.’ So keeping the big money happy is what matters.” Not all will think thus, however, and certainly not all will arrive at Krugman’s conclusion equally fast. Vestigial instincts of self-preservation among Republican members of Congress will slow the legislative timetable against the unforgiving clock. It’s very possible, too, that in the face of negative polling, Trump may panic and go back on it, sabotaging the entire project. It’s quite possible that the only legacy of the great tax reform push of 2017 will be raw material for devastating Democratic attack ads in 2018.

It didn’t have to be this way. It should not be this way.

A rationally conservative party of business and enterprise could, and should, have written a corporate tax-reform bill that is compelling on the merits. The slowdown of U.S. productivity growth would be the country’s leading problem if U.S. constitutional democracy were not being attacked from the White House at the same time. The GOP submitted to Trump in 2016 very largely to reach this moment. The ironic outcome is that his success that year doomed the very prize for which his party sold its soul.

Cross-posted from The Sensible Center