How the GOP became the party of tax cheats

For example, even though every dollar the IRS spends auditing billionaires produces between $6 and $12 in added tax revenue to our government, Johnson insisted with a straight face that we need to cut over $14 billion from the IRS’ budget to “fully pay for” a package of military aid to Israel.

No reporter — as is so often the case when interviewing Republicans — was willing to point out what BS his pitch on behalf of his billionaire owners was. (Nobody wants to be banned from future press conferences or ignored during question time.)

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Johnson repeated his “fiscal responsibility” mantra several times, saying that future legislation to keep the government open would similarly contain radical domestic spending cuts rather than asking the morbidly rich to pay their fair share of taxes.

Which raises the question: When and how did the GOP become the party of tax cheats?

A quick history is in order.

When Republican Dwight D. Eisenhower was sworn in a president in 1953, the top income tax bracket for the morbidly rich was 92%. Eisenhower was just fine with that. He knew it discouraged wealthy people from strip-mining their businesses for every penny they could find at the expense of their employees: instead, employers paid their workers well and rolled corporate profits into R&D to develop new products. It made America the world’s leader in innovation.

In 1946, at the end of WWII, our national debt was 119% of our nation’s GDP, much like today’s 123%. Truman and Eisenhower knew how to reduce that debt: high taxes on billionaires and massive expenditures on American infrastructure like schools, hospitals, highways, and airports to stimulate the economy. In just the seven short years leading to Ike’s inauguration they’d cut our debt down to 68% of GDP.

Jack Kennedy kept those high tax brackets for morbidly rich people: on every dollar over $400,000 a year ($4 million/year in today’s money), people paid 91 cents in income taxes. And, true to form, the economy was rip-roaring along, the middle class was growing faster than anywhere else in the world, and our debt was under control at 54% of GDP.

After Kennedy’s assassination, Lyndon Johnson gave a tax cut for the morbidly rich in exchange for their going along with his Great Society programs including Medicare and Medicaid: he cut the top rate to 70%, although he closed so many loopholes used by the rich that it actually increased federal revenues.

Republican President Richard Nixon was fine with the 70% top bracket on the morbidly rich, too, and kept it in place throughout his presidency. By the time he left the White House in 1974, our national debt was way down to 31% of GDP and it stayed there (32%) through the four years of Jimmy Carter’s presidency (1977-1981).

And then it happened. During Jimmy Carter’s presidency, five Republicans on the Supreme Court legalized — for the first time in the history of either America or any other developed country in the world — political bribery by billionaires and corporations alike.

It was a subset of Lewis Powell’s infamous Memo about how the very, very rich should rise up and seize control of American politics because they knew best how to run a country and, Powell suggested, all those pesky social programs from the New Deal and Great Society had put America on the road to communism.

Powell himself wrote the 1978 decision in First National Bank v Bellotti that legalized political bribery by giant corporations, as I lay out in The Hidden History of the Supreme Court and the Betrayal of America.

Reagan was sworn in on January 20, 1981 and immediately set about remaking the GOP’s top priorities away from what was best for America and toward exclusively serving the interests of obscene wealth.

That moment in 1981 was a major turning point in modern American history for two reasons.

First, Reagan’s campaign had committed treason to win the White House, cutting a deal to give the Iranian Mullahs American weapons systems and spare parts in exchange for their holding 52 US hostages long enough to screw Jimmy Carter’s re-election chances.

In doing so, Reagan set a pattern that would become a recurring theme for the GOP: abandon American values and betray our allies if it means wealth and political power.

George W. Bush, exploiting 9/11, lied us into two unnecessary and illegal wars just to save Dick Cheney’s company and insure his own 2004 re-election. Donald Trump enthusiastically accepted help from Vladimir Putin to win the White House in 2016 and his family has since taken over $3 billion from Gulf state governments.

Second, Reagan pursued Jude Wanniski’s Two Santas political strategy with gusto. Wanniski, in 1977, had argued that when Republicans held the White House they should use tax cuts and budget-busting spending to run up the national debt as fast and high as possible, thus injecting money and stimulus to let the good times roll.

This would make people think Republicans knew how to run an economy. (Back during the Reagan presidency, I used to say, “Give me a $2 trillion credit card and I’ll show you good times, too!”)

Republicans got so good at it that today the average billionaire in America pays around 3.2% in income taxes.

When Democrats came into office, Wanniski said, Republicans in Congress should begin to squeal loudly about the national debt (that Republicans had created with their tax cuts), claiming it was a threat to the nation. This, Wanniski said, would force Democrats to “shoot Santa”: vote to gut their own social programs.

Cue MAGA Mike Johnson.

The smarmy little man was so on-message yesterday that he even claimed that people in our military had told him they thought our national debt was a bigger threat to us than Russia or China. Nothing, Johnson argued, was more important than cutting back on the IRS’ ability to audit billionaires while reducing social program spending.

Medicare, Medicaid, Social Security, food stamps, housing subsidies, Obamacare, unemployment insurance, disability insurance, the Peace Corps, the GI Bill, federal home loan programs, the National School Lunch Act, Head Start, the Family and Medical Leave Act, dozens of supports for public schools: all these programs and more that benefit average Americans were passed by Democrats over the objection of the majority of Republicans.

The sad reality is that the GOP serves only two masters: giant corporate monopolies and the morbidly rich. They’ll toss a rhetorical bone to racists, misogynists, gun freaks, homophobes, and Nazis, but that’s just to get enough votes to hold political power: their real obsession, their true North Star, is great wealth.

Some Democrats were giddy when Johnson was selected Speaker because they thought his lack of experience and his extremist views on abortion, homosexuality, and religion would alienate him from the American public.

But Johnson has proven himself up to the task, if yesterday’s first press conference is any indication. He’ll go to nearly any length to keep the IRS from collecting from his tax-cheat patrons, all while working to gut the American social safety net and giving Putin whatever he wants.

And now he’s collaborating with Republicans in the Senate to create a secret commission to slash Social Security behind closed doors.

So, get ready for the next 14 months (until the next Congress is sworn in January 2025) to be a nonstop attack on America’s poor, our middle class, and the entire spectrum of racial, gender, and religious minorities who make up the fabric of our nation. After all, somebody’s gotta pay for those massive tax cuts Reagan, Bush, and Trump gave Zuckerberg, Bezos, and Musk.