House Republicans want to give corporate America a multi-trillion-dollar tax break. But their budget resolution will only let them add $1.5 trillion to the deficit over the next decade. To solve this math problem, the GOP has decided to eliminate most — but not all — individual tax deductions.
Each of these deductions, by itself, produces a minuscule amount of revenue. And many of them benefit deeply sympathetic constituencies, among them veterans, indebted students, and people who suffer from rare diseases. These facts — combined with the overwhelming unpopularity of corporate tax cuts — make much of the GOP tax plan essentially indefensible (for elected officials in a democracy, anyway).
Perhaps the most politically toxic provision of that plan is the elimination of the adoption tax credit. This benefit makes taking in a parentless child more attractive and affordable, by providing families that do with a one-time write-off of $13,570. The credit disproportionately benefits religious Christians. Many conservatives view it as a “pro-life” policy (the easier it is for an unwanted child to find a home, the less incentive there is for women to choose abortion, at least in their view). And the deduction costs the government about $3 billion over a decade.
So: The benefit is beloved by the GOP base, helps orphans, and costs only 0.15 percent as much the Republicans’ tax break for big business.
And yet, Paul Ryan’s caucus is fighting tooth-and-nail to get rid of it. On Wednesday, Democrats proposed an amendment that would have restored the tax credit. To pay for it, the House minority suggested that instead of bringing the corporate rate down from 35 to 20 percent, Republicans could reduce it to 20.04 percent, instead. The GOP members of the Ways and Means Committee voted in lockstep against the idea.
There probably isn’t a way to justify this vote that’s both honest and politically tenable. But the lie that Ways and Means Chairman Kevin Brady settled on was downright Orwellian.
“I’ve always worried about the current credit because it helps many who are of a certain income level and who qualify,” the Texas Republican said Wednesday. “I worry about those families who are [of] modest income, who don’t itemize [deductions]. I worry the current credit leaves too many Americans behind.”
Clearly, if you’re worried that the adoption tax credit isn’t generous enough to help middle-income families, the solution is to eliminate it entirely. Brady’s ostensible argument is that by doubling the standard deduction, the GOP plan does more to help the average American family adopt than the existing tax code. This is almost certainly untrue.
Regardless, it’s a nonsensical defense of the Republican tax package. The adoption credit costs $300 million a year. There’s no reason you couldn’t double the standard deduction and keep that benefit in place. After all, now that Kevin Brady has suddenly realized that tax breaks for the wealthy are morally unconscionable, he has a lot of money to play with.
If the leading Republican tax writer can’t stomach the adoption tax credit — which is inaccessible to families that make more than $243,540 a year — wait until he hears about his plan’s repeal of the estate tax. That measure exclusively benefits the heirs of estates valued at over $5.5 million — and even lets these trust-fund kids evade any taxation of their parents’ unrealized capital gains!
Repealing the estate tax would cost Uncle Sam $269 billion over the next decade, according to the Center for Budget and Policy Priorities. So, just by leaving this tax in place — as Kevin Brady’s conscience now demands — the House GOP could allocate 90 times more tax dollars to incentivizing adoption over the next decade. Which is to say: They could allow middle-income families that adopt children to have a higher standard deduction — and an even more generous adoption tax credit, too!
Or, ya know, they could tell transparent lies about the purpose of their tax changes, redistribute trillions of dollars to the idle rich, and bet that most of their voters are more invested in resenting African-American football players than seeing their material interests advanced by public policy.