Republicans disdain workers
There is no other way to explain their lopsided tax plan
You can always count on Republicans to do two things: try to cut taxes for the rich and try to weaken the safety net for the poor and middle class. Most recently, George W. Bush sharply cut tax rates on the top 1 percent and tried to privatize Social Security. Now, President Donald Trump and GOP leaders show no hint of the populism Mr. Trump espoused while campaigning.
But as their terrible, no good, very bad tax bill heads for a final vote, something’s been added to the mix. Of course they comfort the comfortable and afflict the afflicted, but they don’t even don’t treat all Americans with a given income the same. Their bill hugely privileges owners — of businesses or of financial assets — over those who simply work for a living.
This privileging of nonwage income isn’t an accident. Modern Republicans exalt “job creators,” that is, people who own businesses directly or indirectly via stockholdings. And they implicitly show contempt for mere employees.
First, about the tax bill: The biggest-ticket item is a sharp cut in corporate taxes. A consensus among tax economists is that most of the money gained will accrue to shareholders as opposed to workers. So it’s mainly a tax cut for investors, not workers.
The second most important tax break is for people whose income comes from owning a business rather than wages. The nonpartisan Tax Policy Center finds that the bill would reduce taxes on business owners, on average, about three times as much as it would reduce taxes on those whose primary source of income is wages or salaries.
As the center’s Howard Gleckman notes, this might mean, for example, that “a partner in a real estate development firm might get a far bigger tax cut than a surgeon employed by a hospital, even though their income is the same.” (Yes, the bill looks as if it were designed to benefit the Trump family.)
If this sounds like bad policy because it is. It also opens the doors to an orgy of tax avoidance. Suppose I could get The New York Times to stop paying me a salary and instead to pay the same amount to Krugmanomics LLC, a consulting firm consisting of one person — me — that sells opinion pieces. I would probably get a big tax break as a result.
The bill will set rules intended to stop such workarounds, but a lot of revenue will be lost to those who game the system. Think about it: We’re pitting hastily devised legislation, drafted without hearings in a few days, against the cleverest lawyers and accountants money can buy. Which side do you think will win?
As a result, it’s a good bet that the bill will increase the budget deficit far more than now projected. And meanwhile, after all those promises Republicans made about simplifying our tax system, they’ve actually made it far morecomplicated.
So why are they doing this?
After all, the tax bill appearsto be terrible politics as well as terrible policy. Cutting corporate taxes is hugely unpopular, and polls show that the publ ic overwhelmingly disapproves of the current Republican plan.
But Republicans can’t seem able to help themselves: Their disdain for ordinary working Americans as opposed to investors, heirs and business owners runs too deep.
When I realized the extent to which G.O.P. tax plans were going to favor business owners over ordinary workers, I found myself remembering what happened in 2012, when Eric Cantor — then the House majority leader — tried to celebrate Labor Day. He put out a tweet for the occasion that somehow failed to mention workers at all, instead praising those who have “built a business and earned their own success.”
Yes, it was just a gaffe, but a revealing one; Cantor, a creature of the G.O.P. establishment if ever there was one, had so little respect for working Americans that he forgot to include them in a Labor Day message.
Now that disdain has been translated into legislation that treats anyone who works for someone else — that is, the vast majority of Americans — as a secondclass citizen.