Washington Post columnist Henry Olsen thinks that conservatives are finally waking up to the idea that the Republican’s tax policies don’t benefit the bottom line for their families.
It has been 16 years since Thomas Frank published his book What’s the Matter with Kansas, which makes the case that Republicans consistently vote against their own economic interest because they’re distracted by issues like LGBT equality and abortion. Since then, Republicans have continued to push tax plans that support the “trickle-down economics” theory that giving huge tax benefits to the top percent of wage earners and to corporations.
Analyses of the GOP tax plan, signed into law by President Donald Trump in 2017, show that it never truly trickled down to anyone. A report from the Congressional Budget Office on the bill showed a wage growth of just 3.1 percent. To put that in context, the year before the GOP tax cut, April 2015 to Jan. 2016 had a 3 percent increase in wage growth.
The only benefit has been to the stock market, where companies raise money for their companies by selling stocks. With a hefty tax cut to those corporations, it makes sense that the measure of corporate success would show benefits from the tax bill aimed to benefit them.
“Trump’s 2017 tax legislation was pitched as a cut for the ‘middle class,'” wrote Olsen, “in truth, it was typical Republican supply-side economics. Large- and medium-sized businesses got most of the benefit. The major reason many middle-class families got a cut was the bill’s increase in the child tax credit, an idea pushed by Sen. Marco Rubio (R-Fla.) and his allies but strenuously opposed at the time by traditional tax cutters. With the elimination of personal exemptions and the limit of certain deductions, some middle- and upper-middle-class empty-nest taxpayers even got a tax hike.”
Trump even admitted that his so-called “middle-class tax cut” was never aimed at actually cutting middle-class taxes. Just weeks before the 2018 mid-term election, Trump announced that he would be doing an actual middle-class tax cut in 2019.
“We’re putting in a resolution some time in the next week and a half to two weeks [and] we’re giving a middle-income tax reduction of about 10 percent,” Trump told reporters at the White House.
The promise of a middle-class tax cut from the GOP or the White House in 2019 never manifested. Now Trump is promising it again.
“We’re talking a fairly substantial … middle-class tax cut that’ll be subject to taking back the House and obviously keeping the Senate and keeping the White House,” Trump told the Wall Street Journal during an interview at the World Economic Forum in Davos, Switzerland. He promised it would be revealed in 90 days.
If the first tax cut was for middle-class Americans and was so successful, why would the president need another middle-class tax cut?
Olsen cited Austria’s conservatives and Britain’s Conservative Party for those discovering such conservative promises are all lies. In Britain, conservatives lost seats and in Austria, a coalition of non-conservatives came together to give a tax cut to those making under $67,000.
“It is hard to understate how revolutionary this thinking would be for the Republican Party,” he wrote. “For decades, GOP economic orthodoxy has dictated that tax cuts should flow first to the wealthiest and only then to the rest of us. This is based on the supply-side theory that lowering the top rate paid by the richest Americans incentives people to work harder and innovate more. Cutting tax rates on capital gains is another holy grail for supply-siders for the same reasons. Many even want to eliminate the capital gains tax entirely, something that would mean many of America’s billionaires would pay next to nothing in income taxes.”
He explained that GOP tax cuts for the rich might get economics professors’ excited to play with computer models and excite Trump’s advisers, but it will never appeal to America’s working families.
“Trump should heed his populist instincts and the evidence from his fellow conservative leaders and craft a tax cut for the many, not the few,” Olsen closed.