Video: Deputy editorial page editor and columnist Ruth Marcus counts the reasons why she thinks the GOP tax bill is awful. (Gillian Brockell, Kate Woodsome/The Washington Post)
Just months ago, Republicans got away with a massive upward redistribution of wealth, raiding $1.5 trillion from the Treasury and sticking future generations with the bill.
Now, they’re going for more.
On Wednesday, President Trump touted his ginormous, sloppily drafted, deficit-financed tax cuts, written under cover of night without benefit of hearings or experts. The whole thing was so much fun, he said, that he hopes to do it all again.
“We’re actually going for a phase two which will help – in addition to middle class, it will help companies and it’s going to be something I think very special,” Trump said in Missouri. “Kevin Brady is working on it with me, Congress is working, the Senate’s working.”
Brady, R-Tex., the chairman of the House Ways and Means Committee, confirmed another tax-cut bill was in the works.
“We think even more can be done,” he gushed on Fox Business Network.
Larry Kudlow, Trump’s incoming National Economic Council director, has likewise declared his excitement to be slashing taxes further. During a CNBC interview, he said the next round should make the individual cuts permanent and add a cut to taxes on capital gains. Capital gains, which refer to profits on sales of capital assets such as stocks or land, had gone untouched in the law that passed in December (though they already receive preferential treatment, mind you).
This is all pretty rich. In all senses of the word.
Nearly two-thirds of the tax cuts Republicans passed in December will go to the top income quintile this year, according to the Tax Policy Center. Further cuts, especially if they target capital gains, are likely to be similarly plutocratic: Households making more than $1 million account for about two-thirds of all capital-gains income, according to IRS data.
This scheme is also coming from a party that once upon a time – way back in 2016, when a Democrat held the White House – decried out-of-control deficits.
Yet somehow we are already on track to have a trillion-dollar deficit this year, thanks to the recently passed tax law and additional spending increases. This fiscal flip-flop is astonishingly ill-timed, especially when you consider where we are in the business cycle. For most of the past 70 years, deficits fell when unemployment improved; today, with unemployment at a mere 4.1 percent, we’re engaging in huge deficit-financed stimulus.
Meanwhile, precisely because the economy has been improving, the Fed is raising interest rates. This is yet another factor that makes swelling our debt so dangerous right now.
Bafflingly, the party of fiscal conservatism has looked at all these factors and decided: Yup, now is definitely the time to dump even more tax cuts on the federal tab.
The question is: Why? Why gorge on more tax cuts, especially now?
Sure, public perception of the new tax law has improved from the bottom-of-the-barrel ratings it received in December. But approval ratings have leveled off since January, with only about 4 in 10 Americans saying they like it.
The GOP’s likely loss in Tuesday’s Pennsylvania special congressional election, in a district Trump carried by nearly 20 points in 2016, should also temper Republicans’ enthusiasm for further tax cuts.
The tax bill was the party’s only major legislative achievement last year, and so, understandably, Republican ads in the Pennsylvania race showcased the new policy.
At least at first.
For the first two weeks of February, two-thirds of broadcast TV ads promoting Republican candidate Rick Saccone highlighted the GOP tax plan, a Politico analysis found. But over subsequent weeks, fewer and fewer ads even mentioned taxes, and by early March they were virtually nonexistent.
Apparently even in the reddest of red districts, tax cuts for rich people and corporations just didn’t resonate.
The problem for Republicans, of course, is that at this point, tax cuts are the only thing they stand for. As conservative commentator Robert Novak once put it, “God put the Republicans on Earth to cut taxes. If they don’t cut taxes, they have no overriding rationale for existence.”
It’s true. They can toss some red meat to the base -- Saccone’s closing argument in Pennsylvania was that liberals hate God -- but the only actual policy they can reliably line up behind is cutting taxes. Especially with a president whose views on virtually everything else (including guns, immigration, health care) change from minute to minute.
The only thing left is to throw more good money after bad.
Catherine Rampell’s email address is email@example.com. Follow her on Twitter, @crampell.