April 15, 2019 | Reading Time: 4 minutes
Republicans Betrayed Themselves
No point in being a Republican if you can't brag about tax cuts.
Few Americans noticed they got a tax cut this year, according to Bloomberg News. That’s because the cuts were too small for most people to notice or because other people owed more in taxes than usual. It’s also because Congressional Democrats did a pretty good job of telling the public the truth. The whole point of the 2017 Tax Cuts and Jobs Act was lowering rates for the very, very rich and big corporations.
The law did not power economic growth. (Growth has been slowing.) It therefore did not pay for itself. It probably never will. The law is responsible for a historic spike in the US debt. (This fiscal year’s deficit is expected to reach $1 trillion). It did not spark investment. Publicly traded firms used the surplus to buy back stocks, enriching the already very, very rich. The law did none of the things that Donald Trump and Republican leaders said it would. Now the president has nothing to brag about.
To be sure, he’s going to lie. Trump is going to give voice to a crush of falsehoods in an effort to invent the appearance of a rationale for tooting his own horn. His economic advisor keeps telling the press that the law has paid for itself. (It hasn’t.) And the president’s trip to Minnesota this week is one in a series of events aimed at promoting what Republicans leaders are saying is their signature legislative achievement.
As long as “state’s rights” meant all states, tax cuts were sure to draw mainstream approval.
But if four in five people haven’t noticed any change in their tax liabilities, and if those who have noticed are mostly Republicans who approve of the president’s performance anyway, where does that leave a Republican Party that bills itself as the party of fiscal responsibility? If you can’t brag about tax cuts, there’s no point really in being a Republican, as tax cuts have been key to economic thinking for at least 50 years.
We shouldn’t underestimate the oddity of this moment. Americans have tended to like tax cuts. We don’t mind tax cuts even for the very rich as long as everyone else gets one, too. They were popular when George W. Bush lowered them. They were popular when Barack Obama kept Bush’s rates for the middle class. They were popular right up to the moment when the Republicans took the White House in 2016 and smashed a tax overhaul through the Congress without a single Democratic vote. Public opinion once elevated tax cuts, so they appeared to be democracy in action. Without public opinion, however, the Republicans were stranded. More like oligarchy in action.
Why the public soured on tax cuts is a question I’m not equipped to answer. But it doesn’t take a specialist to see that whatever consensus prevailed vis-a-vis tax cuts fell to pieces in the Great Recession of 2007-2008. The economic preferences of the Republican Party had been the preferences of the mainstream. But that changed once the economy unraveled, as if GOP economic thinking filed for bankruptcy. Bernie Sanders did a lot to promote “democratic socialism.” But it takes more than a failed candidate to bring previously marginal ideas to the fore. It takes a global disaster.
We mustn’t discount the role of betrayal. Tax cuts had been a mechanism by which the Republican Party achieved a loftier ideological goal, which was to minimize as much as possible the active role of the federal government in the private lives of Americans.
The theoretical assumption here was that the presence of government was proportional to the absence of individual liberty. Tax cuts therefore were a means of controlling government’s reach into civil society. This was always about the interest of Southern states in continuing to violate the rights of their residents. But as long as “state’s rights” meant all states, tax cuts were sure to draw wide mainstream approval.
Even before the Republicans rammed the new law through Congress, it was clear they were going to sacrifice some states to give others a break. Party leaders made sure of that. They discussed openly the idea of eliminating deductions for state and local taxes in order to pay for part of the $1.5 trillion legislation. Those states, as it happens, were states won by Hillary Clinton, states with high rates of taxation. In capping SALT deductions, the new law in effect increased taxes on thousands of blue-state residents.
In my view the SALT cap powered a backlash against Trump among Republicans in blue states. New England used to be somewhat competitive. There is now one Republican representing the whole region in Washington. Things are worse in California. The modern conservative movement began in Orange County. How many Republicans are left? None. The Republican Party literally took 50 years of its history, in which state’s rights meant something to the national party, and traded it for greed.
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