House Republicans have passed a grotesque tax giveaway to the richest 1 percent that will only exacerbate America’s biggest economic and political problem: the massive income inequality that inhibits broad-based growth and is leaving more and more Americans out of the middle class.
What’s more, the Republican tax bills squander essentially all the money needed for investments that would actually grow the economy to the benefit of all Americans; namely, rebuilding our antiquated infrastructure to be competitive in the digital economy.
Republican Senators have replicated these mistakes in legislation that has passed the tax-writing Finance Committee, adding repeal of a key element of the Affordable Care Act, to boot. They have now pledged to push the bill through the full Senate as early as this week and into an expedited conference with the House to be signed into law by Trump before Christmas.
Shockingly, for the moment, Senate Democrats seem to be relying on the sheer depravity of the GOP bill to prevent passage. Well, that didn’t work in the House, and it’s unlikely to work in the Senate, either. The pressure on Senate Republicans, even those retiring, like Flake and Corker, will be enormous.
In the aftermath of the shellacking they suffered in Virginia and other recent off-year elections, Republicans, led by President Trump, House Speaker Paul RyanPaul Davis RyanJuan Williams: Pelosi shows her power Cheney takes shot at Trump: 'I like Republican presidents who win re-election' Cheney allies flock to her defense against Trump challenge MORE (R-Wis.) and Sen. Mitch McConnellAddison (Mitch) Mitchell McConnellHoyer signals House vote on bill to 'remove' debt limit threat Biden signs bill to raise debt ceiling On The Money — Progressives play hard ball on Biden budget plan MORE (R-Ky.), have convinced themselves that they have to pass this travesty of a tax bill or face decimation in the midterms, no matter how bad the bill will be for the country.
But Democrats simply cannot afford to allow these devastating structural tax changes to become law. Such changes will consign our economy to increasingly Latin American levels of inequality and low growth for years to come, while also perverting our politics as a few far-right billionaires wield almost unlimited political influence.
So, on both political and policy grounds, Democrats have to prevent passage of the Republican tax nightmare.
The best way for Senate Democrats to kill the Senate bill is to offer a profoundly different plan of their own, focused on broadly shared economic growth, and explicitly contrast it with the Republican giveaways to the rich.
The goal should be to rally and mobilize such an overwhelming outcry against the Republican bills that Senate moderates will feel they no choice but to vote against them and make Congress start over on a bipartisan basis.
Already, 52 percent of Americans are against the GOP tax bills, while only 25 percent support them, according to a new Quinnipiac poll, so the ground should be fertile.
To be most effective, Democrats should combine politically popular infrastructure plans with tax relief for the working and middle class, as well as tax breaks for small- and medium-sizes firms left out by Republicans. These tax and infrastructure measures should be combined into a package that could rightly be called “Rebuilding America.”
Crucially, at this juncture, Democrats should not limit themselves to proposals that are deficit neutral. Leading economists like Larry Summers have long argued that debt funding for investments like infrastructure, which increase long-term productivity, are economically sound, and indeed wise, especially when interest rates are historically low, as they are now.
This is in stark contrast to the completely discredited Republican trickle-down "dynamic scoring" argument that somehow tax giveaways to the rich and huge corporations will increase tax revenue.
Independent analysis shows that the Republicans bills will increase the debt by at least $1.4 trillion, even if some growth occurs as result of their passage. The GOP is hell-bent on adding to the debt recklessly, massively and for the worst reasons.
Democrats should be comfortable with much smaller increases to the debt, but insist on ones that will actually grow the economy.
Economists also broadly agree that worsening income inequality will reduce long-term economic growth, as a smaller middle class lessens demand for goods and services. Middle-class consumers, not the rich, drive American economic growth, so they should be the focus for Democrats.
The benefits of even the corporate tax cuts will not result in large investments in new middle-class jobs, according to most analysis, but only accrue to the investor class through higher dividends and stock prices. And, of course, roughly half of Americans don’t own any stock, at all.
The Republican Senate Finance bill would in fact raise taxes on those earning less than $70,000 a year — the middle of the middle class — while lavishing huge tax cuts on the richest 1 percent. Even many taxpayers earning just $30,000 will face high taxes over time under the GOP plans.
Pushing an infrastructure package also puts Republicans at a tactical disadvantage.
Remember that promised GOP infrastructure bill, which Trump claimed again this this summer he would deliver? Well, you can forget about it if this monstrosity of a tax bill becomes law. The Republicans will have given away all of the infrastructure money to the rich.
So listen up, Sen. Chuck SchumerChuck SchumerBiden's Supreme Court commission ends not with a bang but a whimper Hispanic organizations call for Latino climate justice in reconciliation Senate to vote next week on Freedom to Vote Act MORE (D-N.Y.). Force wavering Republicans to choose: Rebuild America and provide tax cuts that will benefit the middle class, or vote for a reckless tax giveaway to very richest 1 percent.
But make no mistake: Today’s GOP has no conscience. They will vote for this wreck of a tax bill just to claim a “win.” Unless, that is, Democrats provide an alternative that can stop Republicans in their tracks.
Paul Bledsoe is a strategic adviser with the Progressive Policy Institute, and former communications director of the Senate Finance Committee.