the national interest

Republicans Say Democrats Secretly Like the Trump Tax Cuts. Uh, No.

Senate Minority Leader Charles Schumer. Photo: Chip Somodevilla/Getty Images

Why don’t any Democrats in Congress support the tax-cut bill? It is a mystery that has been gnawing at many Republicans (though at zero actual Democrats inside or outside Congress). “Our Democratic colleagues simply refused to participate in the process,” complained Senate Whip John Cornyn on ABC. “We probably could have made it better if they had.” Many Republicans have suggested the same conclusion: In their hearts, Democrats truly love cutting taxes for corporations and extremely wealthy heirs, but politics prevents them from saying so. “Obstructionist Dems trying to block because they think it is too good and will not be given the credit!” tweeted President Trump. “We’ve had a lot of very productive conversations with Democrats who I believe are intellectually there,” insists Ivanka Trump. “Their hearts are there but the party’s not there and the leadership’s not there.”

If it were true that Democrats secretly liked the tax cut, but only opposed it for political reasons, you’d expect liberal and centrist economists to support it; after all, economists don’t have to run for office. Nothing of the sort is in evidence. A University of Chicago survey of economists found almost total agreement that the Republican plan would increase the debt and would not substantially accelerate economic growth. It is impossible to find a left-of-center economist who supports the bill, while even conservative economists like Greg Mankiw, who shares the GOP’s objective of reducing taxes on the rich, has criticized their plan.

Tax lawyers have ripped the plan to shreds as a shoddily designed invitation for more loopholes and tax shelters. Even assuming the tax cuts work as intended, rather than opening up new and unintended avenues for tax avoidance by rich people, they would exacerbate inequality:

And that is not accounting for the spending reductions that will eventually be necessary to offset the loss of revenue.

And yet Democratic opposition remains a mystery conservative minds feel compelled to explore. A Wall Street Journal editorial elucidates the popular conservative theory that the Democrats oppose the Trump tax cuts because they have gone mad with hatred. “The 1986 tax reform was driven as much by Democrats as by Ronald Reagan,” the editorial notes sadly.

That is true. Democrats did support the 1986 Tax Reform Act, mainly because it was a tax reform act. The law eliminated preferences in the tax code and forced many businesses and individuals that had avoided taxes onto the tax rolls. The law was budget-neutral and distributionally neutral — in fact, it increased the overall effective tax rate on the rich.

Maverick right-of-center policy wonks like James Pethokoukis proposed tax reform that followed this pattern — reforming the tax code without a net tax cut or a net benefit for the rich. Democrats offered to work with Republicans on a bill to do a tax reform like this. Republicans declared those parameters unacceptable right from the outset. The GOP would only design a bill that reduced revenue and gave the rich a tax cut, and any bill that failed to do so was unacceptable.

Of course, Republicans truly believe cutting taxes for rich people is a moral good, and have every right to do it. But since their idea of a moral good is deeply unpopular, they have a congenital need to conceal their true intentions. Their displays of hurt and confusion are farcical. That Democrats refused to join an exercise Democrats find economically useless, fiscally irresponsible, and morally grotesque does not require any serious thought.

GOPers Say Dems Secretly Like the Trump Tax Cuts. Uh, No.