To call the legislation passed in the Senate early Saturday morning a “tax bill” way undersells the scope of its expected effects on American life. In reality, the Republican plan represents a generational effort to reshape the US economy, slashing corporate rates and taxes that primarily affect the wealthiest in society.
Democrats are railing against the spending cuts that are expected to follow, and they warned that a provision in the Senate bill that would eliminate the Affordable Care Act’s individual coverage mandate could leave 13 million people without health insurance while raising premiums across the board — thus negating the effect of any temporary middle-class tax cuts.
Most Republicans, meanwhile, argue that reducing corporate tax rates from 35% to 20%, or thereabouts, will spur economic growth and create jobs. (Economists — and CEOs! — are not so sure about that.) When the nonpartisan Joint Committee on Taxation projected that the bill would add an estimated $1 trillion to federal budget deficits, the GOP urged caution and later argued, again, that the economists were wrong.
The reality is this: History suggest the experts have a better beat than the politicians on how this all plays out. And in any event, we’ll see — and feel — the impact. Taxes are real, visceral and when people believe they’re being hard done, it’s just about politically impossible to message your way out of it. The way politics works, Republicans will be either rewarded or will lose their majorities.
But it’s important, even in the fog of legislative sausage-making, to think about the ideology that is giving shape to the bill. Two recent quotes from senior Republican lawmakers spell out some key underlying assumptions — not just about the economy, but human nature.
The first came from Sen. Chuck Grassley of Iowa. He has long wanted to kill the estate tax, a levy on the money handed down through generations, which Republicans often call “the death tax,” on the grounds it hurts farm and other small business owners.
Here’s a short excerpt from a report by The Des Moines Register’s Jason Noble. Grassley, in an interview on November 29, explains his position on the specific issue — and then branches out a bit:
An estate tax effectively and unfairly taxes a person’s earnings twice, (Grassley) argued: first when they earn it and again when they die. And, he added, it penalizes savers without touching spenders.
“I think not having the estate tax recognizes the people that are investing,” Grassley said, “as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”
The latter quote has, in the two or so days since it was published, gone predictably viral. But even setting aside, if only for a moment, the troubling gender assumptions, the line is instructive.
Grassley here spells out a core conservative value, present in the tax bill, that says wealth should be directed to capital both as an economic principle and a social one. The workers, in this construction, will simply waste it away at the pub or on cheap entertainment. Business owners, on the other hand, are by virtue of their standing better suited to guide the economy — and, on a moral level, more deserving.
In another episode circulating widely online, Grassley’s colleague Orrin Hatch of Utah, the Senate Finance Committee chairman, gets into (another) public scrap with Sen. Sherrod Brown, an Ohio Democrat, this time over funding for the Children’s Health Insurance Program. The last CHIP authorization ran out in October and there’s been no serious effort, as yet, to re-up it.
Hatch cosponsored the original legislation with the late Democratic Sen. Ted Kennedy of Massachusetts, so he has some bona fides here, and in his exchange with Brown he assured the Democrat that a deal would come together soon. But Hatch didn’t stop there. Here’s what he said, with some context, and two notable points in bold:
“We’re going to do CHIP, there’s no question about it in my mind. And it’s got to be done the right way. But the reason CHIP’s having trouble is because we don’t have money anymore, and to just add more and more spending and more and more spending, and you can look at the rest of the bill for the more and more spending. I happen to think CHIP has done a terrific job for people who really needed the help. … I’ve taken the position around here for my whole Senate service — I believe in helping those who cannot help themselves, but would if they could. I have a rough time wanting to spend billions and billions and trillions of dollars to help people who won’t help themselves, won’t lift a finger and expect the federal government to do everything.”
The first bolded bit raised liberal hackles because, not long after he said it, Hatch and other Republicans voted to advance such an expensive piece of legislation (which would cut taxes for corporations and the wealthy). Hatch had also ushered it through the Finance Committee. But it’s the second riff that is most relevant to the moment.
Hatch here states that other unnamed programs designed to direct “billions and billions and trillions of dollars” to people in need are ill-conceived giveaways to do-nothing layabouts. It’s not exactly as ghoulish as his partisan opponents have suggested — rivals, it’s worth adding, in the Democratic Party who have themselves voted to reduce or “reform” welfare programs in the past — but the ideological thread is clear.
It’s apparent in the tax bill.
By the logic of the plan, people who get rich in business or through the stock market — or some combo — really earned it. The country’s worsening economic inequality problem isn’t symptomatic of a flaw in the system, something to be fixed by the government, but the natural product of individuals’ (bad) choices — their laziness or profligacy or whatever else.
If you accept that, then a bill that delivers big bucks to the rich makes total sense. It’s not greed, it’s righteousness.