The Big Heist

Evan Vucci/AP

I mentioned yesterday on Twitter that a “heist” is a better label for the GOP tax plan than “GOP tax scam” or whatever Democratic activists are calling it. The people mobilized against this legislation have done a great job. It doesn’t look like they’ll stop the bill. But they have clearly cemented in the public mind that the tax bill is a brazen giveaway to the richest Americans and corporations. So my point isn’t to criticize. But I think we need a better sense and description of what is happening.

Republicans could have done right-leaning tax reform – basically, a revenue-neutral rooting out of distorting or unmerited tax loopholes and exemptions which are matched with a lowering of nominal rates. They could have done a straight up big tax cut – along the lines of what George W. Bush did in 2001 – an overall cut to pretty much everyone’s marginal rates in which the wealthiest people get the overwhelming share of the benefit.

They didn’t really do either.

The absolute need to pass something and to pass it fast led to a legislative process which was akin to driving the truck up to the loading bay and just taking everything. Looting. Or perhaps a mob bust-out. You may remember there was one episode of The Sopranos that was based on the “bust out” idea. A guy got into debt to Tony. So Tony and his crew took over his business, started ordering goods that they’d then fence for cash. They ran up every debt they could. When they couldn’t squeeze anything more out of it they burned it down to collect the insurance money. News late last week (accompanied by low-energy non-denial denials) that Paul Ryan will likely retire at the end of this Congress completes the tale. Take the money and run.

Some people argue that since Ryan fancies himself a budget guy and wants to shift the direction of the American budgetary process in a decisively rightward direction, it makes sense for him to retire after such an accomplishment. I don’t buy it. If Ryan had a normal Republican President and could foresee a period of Republican dominance in which his party could fundamentally reshape the country’s future, I don’t buy for a minute he’d be considering retirement. He’s not even 50 years old. His life is politics and elective office. I do not buy it.

Far more likely, Ryan is understandably weary of trying to govern in Trump’s Washington and sees a flood tide coming next November. So why not call game while you’re ahead and leave? I continue to think that, despite the events of the last year, our politics are governed by a central reality: Republican efforts to use geographical distribution, voter suppression, aggressive gerrymandering, Citizens United-style attacks on campaign financing and more to secure power in the face of a declining voter base and policy outcomes that can be locked in over time.

The unfortunate thing for Democrats is that they’ve been fairly successful at this. Perhaps it seems Pollyannaish of me to frame it this way. I’m not arguing that the Democratic millennium is inevitably around the corner. They could be successful at it for a lot longer. But the cornerstone of contemporary Republican politics is a posture of reclamation and revenge, people who feel they are on the losing end of history and want to call a stop to what’s happening. This doesn’t lead to a forward-looking politics. On the cultural side of the equation, the voting strength of the GOP, it’s a politics that wants to reclaim things that were lost. On the elite/money side, the inevitable companion of this sort of political pessimism is the desire to cash in while there’s still time.

You can see this writ large and small through the passage of this bill. Tax reform in any real sense has as a primary goal – perhaps the primary goal – reducing the ways in which different kinds of income or income that is structured in different ways get taxed at different rates. This bill does the exact opposite. What this means is that the effect of the bill will be an initial period of confusion (when people try to figure out their tax liabilities) followed by a bonanza for those who are the most aggressive and canny about exploiting these complexities for tax avoidance. After the confusion/bonanza cycle plays out you eventually settle down to an economy filled with inefficiencies and distortions which an effective tax regime should attempt to limit and in which the super wealthy benefit more at the expense of everyone else. ‘Reform’ is an inevitably plastic concept. But in any sense of what ‘tax reform’ has ever meant, this is the precise opposite.

As the hours and minutes before final passage tick by, we’re hearing more and more examples of the most comical and predatory carve-outs for certain kinds of income almost exclusively generated by the extremely wealthy. The provision being labeled the “Corkerkickback” is a special rate for LLC’s with large amounts of depreciable property (usually commercial real estate) and very few employees. Translated that comes out to: a special rate for people making large sums of passive income while employing few or no people. It is literally a rentier tax break. What possible public policy rationale could exist for such a provision beggars the imagination.

But again, the big picture is one of political pessimism and desperation leading to a public policy of generalized looting. That’s the story of this bill. Tax cuts are the driving force of elite Republican politics. The lack of a bill was demoralizing the donor class, driving down contributions. 2018 looks bad but with literally no major legislative accomplishments to show, maybe it gets even worse. So you need to pass something. Where do you get the votes? Sell them. Every man and woman for himself. Everybody take a few appliances out of the store before we burn it down. That’s the story of this bill. It doesn’t even add up in conservative policy terms. It’s really just a heist. Organized looting.