GOP buddy movie won’t stand (tax) test of time
Dating back to the days of Walter Winchell, there was a standard photo display that newspapers used when celebrity couples headed to Splitsville. Tabloids would feature an earlier picture of the couple frolicking on a beach or walking down the aisle with the caption, “In Happier Days.”
Odds are high that Monday’s buddy-movie Rose Garden press conference with the odd couple of Donald Trump and Mitch McConnell will soon invite similar “In Happier Days” nostalgia. Did anyone believe Trump’s claims that the two men are “closer than ever” and that “the Republican Party is very, very unified”?
Of course, the cause that brought the two together is the never-ending quest for lower taxes, the one constant in GOP ideology since the rise of Ronald Reagan.
Over the last four decades, the Republicans have gone from the party of balanced budgets to one that believes that the numbers will automatically add up if you say the magic words “economic growth.” In this century alone, the GOP has undergone headspinning turnabouts on immigration and free trade.
And of course, Russia has been transformed from Reagan’s “Evil Empire” to the world’s only nation so perfect that the president never has reason to utter a syllable of criticism.
Through it all, in good times and in bad, the Republicans have always worshipped at the altar of tax cuts. As McConnell said Monday, “It’s about both reduction and reform. It’s been 30 years since this kind of effort was undertaken successfully, and we’re going to succeed this time.” Well, maybe. Remember, the actual tax bill hasn’t even been written yet. All we are dealing with is a nine-page framework rather than a complex piece of legislation.
These days, talk of fissures and fractures in the Republican Party usually refers to Steve Bannon’s threat to primary every GOP senator who has ever sent a Christmas card to McConnell. But even without Bannon’s efforts to remake the GOP in his unshaven image, the tax issue underscores the cleavage in the party between the donors and the voters.
The Koch Brothers and their network of super PAC donors have plans to spend as much as $400 million on the 2018 elections to ensure that the Republicans retain control of Capitol Hill. But this massive political investment appears to be partly contingent on Congress passing tax legislation to the liking of the donor class.
What matters to the GOP’s super PAC brigades is eliminating the last vestiges of the inheritance tax; dramatically lowering the top corporate tax rate from its current 35 percent; trimming the top individual tax rate; and embedding various tax favors in the fine print of the eventual legislation.
Even if such alms-for-therich tax legislation actually provides tangible trickledown benefits to middleincome Americans (an iffy proposition), voters are unlikely to see these benefits before the 2018 elections. As a result, the way that most families are going to judge the Republican tax cut — if it passes — will be to look at their own take-home pay.
This is the dilemma for Trump and McConnell: The donors don’t care about the middle class. And the middle class doesn’t care about the donors. Yet pulling off a major tax bill that satisfies both groups is key to the Republicans’ 2018 prospects.
Complicating everything are the lobbying groups and trade associations ready to pounce on every clause in the tax bill that might cost their clients and members money. Take as an example the concerns of two GOP-leaning groups with clout on Capitol Hill: the real estate agents and the home builders.
The Trump tax framework explicitly protects as sacrosanct the mortgage interest deduction. That, in theory, should satisfy the real estate industry. Except, as Wall Street Journal reporter Laura Kusisto points out, the proposed doubling of the size of the standard deduction would mean that fewer taxpayers would save money by deducting their mortgage interest payments.
Already, the National Association of Realtors is touting a study that predicts the Trump tax bill would initially cut house prices across the country by 10 percent. The Journal reports that, in contrast, the National Association of Home Builders might support the Trump bill, but only if other sweeteners for the real estate industry are added.
These what’s-in-it-for-us calculations will be conducted by every industry in America as they scrutinize every line in the tax bill with the avidity of a classical scholar examining a new ancient Greek manuscript. That is why it is hard to predict what will be left of the middle-class tax cut when all the special-interest deals are cut on Capitol Hill.
What is virtually certain is that Trump will berate and bait McConnell over the slow tempo of the dance of tax legislation in the Senate. But, at least, the majority leader can take comfort that he and the president were close friends on one Monday afternoon in October.