There are few things more boring than tax reform. There are also few things more important.
In a news cycle dominated by demagoguery and sex scandals, tax legislation is pretty dull stuff. But it’s where the rubber meets the road. It’s where math trumps rhetoric. It’s where populist promises go to die and the government’s true priorities get exposed.
Tax code is a building block of democracy. It’s an algorithm that determines what kind of country we want to be. It’s a gauge to measure our commitment to the social contract.
More bluntly, tax code is one of the most important things that separates civilized democracies from backward kleptocrats.
“Show me a government’s tax plan, and I’ll tell you what kind of government it is,” Central America tax expert Julio Francisco Báez told me several years ago.
At the time, Báez was talking about Nicaragua’s efforts to pass a corporate-friendly fiscal reform that he said contradicted the Sandinistas’ stated goal of being a socialist government by and for the working class. In reality, Báez told me, the Sandinistas’ tax plan was designed to protect bankers and increase the tax burden on Nicaragua’s pinched middle class and lower-income workforce. The Sandinistas’ math simply didn’t support their populist promises.
It’s hard not to see the comparison to the Republicans’ tax bills now. Donald Trump, with his limited verbal skills and fleeting attention, insists that the tax reforms will benefit the middle class and provide “rocket fuel” for the economy. At least I think that’s what he’s trying to say…
But the numbers tell a much different story. Early analysis shows the Republicans’ tax cuts would saddle the U.S. with an additional $1 trillion debt, impose creeping tax burdens for the middle class, and slash billions of dollars in welfare spending, many economic experts say.
Like so many tin-pot governments that came before them, the Republicans have devised a regressive, corporate-friendly tax plan that would favor the rich while blowing up the debt and defunding social programs for the poor. Their tax plan would drive an even bigger wedge into the yawning gap between rich and poor—the hallmark of a third-world country.
The House bill, according to critics, essentially puts Trump’s personal interests above those of the country.
Many of the provisions in the proposal will help President Donald Trump’s businesses and boost his personal income, said Seth Hanlon, a senior fellow at the liberal-leaning Center for American Progress. Those include the phase-out of the estate tax and lower rates for pass-through income.
“It’s almost as if this bill was written by Donald Trump’s accountant,” Hanlon said.
The Senate bill might be even worse. It includes a 2026 sunset clause that would phase out the individual tax provisions for the middle class, including the doubled child tax credit and lower tax rates at each income bracket, to subsidize permanent tax cuts for the rich.
That’s the opposite of what Robin Hood did.
The Senate bill also makes a mockery of our democracy by trying to fast-walk this junk legislation through Congress in time to have it gift-wrapped and under Trump’s tree before Christmas. It seems like the “world’s greatest deliberative body” doesn’t really want to spend any time deliberating.
The United States is ending the year at a precarious crossroads. The ruling Republican party has lost its way (I’m old enough to remember when the GOP was against trillion-dollar deficit, Russian meddling, and pedophilia) and is now lining up behind an unhinged authoritarian narcissist who uses the presidency to promote his family name and attack his personal enemies.
This is textbook third-world politics. And if the Republicans get away with it, they’ll have a textbook third-world tax plan to match.
Tune in to The Feed Tuesday nights on Fusion for more on this story.
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