It seems that every Republican member of Congress has been given the same script to use in firing off an op/ed column to their local newspaper: Federal tax overhaul is overdue.
No kidding. We can all agree — Democrats, Republicans and independents — that the federal tax code is broken and needs to be fixed — now. It's been more than 30 years since its last revision, which is far too long ago.
What's needed, though, is a genuine attempt to fix the tax code, removing all the inequities that have built up these past 30 years and making taxes fair for everyone. But that's not at all what Donald Trump and the Republican-controlled Congress proposed last week. Theirs is a plan that isn't reform at all, but a tax cut for corporations and the upper class masquerading as reform. And no matter how often they claim that it's a tax cut for the middle class — say it enough times and the people will believe it — it isn't.
Instead of reform, it's really yet another attempt to foist the "trickle-down" theory on an unsuspecting public — you know, the theory that has failed time and again since it was first introduced by Ronald Reagan in the 1980s. It's premised on a belief that when you cut taxes for the wealthy and big businesses, they automatically invest and hire more workers and all those wages and benefits trickle down to the middle class and below.
Trouble is, it has never worked that way. Studies have shown that for the most part, corporations use that extra money to buy back shares, increase dividends for stockholders and discover new ways to give their CEOs even more money.
Kansas Gov. Sam Brownback is the poster child for the failed trickle-down school of economics. Determined to show the rest of the world how it could really spur an economy, Brownback made significant tax cuts on upper incomes, and within two years the state was awash in debt and its middle and lower classes hadn't made any discernible gains from all that money that was supposed to come trickling down. He was politically embarrassed when his own fed-up Republican Party overrode his veto in order to restore higher taxes on the wealthy.
But Trump, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell are slow learners.
All three keep telling us, as do their colleagues who are writing all those cheery op/eds, that the time has come for tax reform, that this is a big tax cut for the middle class. Ryan is the worst of the lot, brashly contending that it's all aimed at helping the middle class.
Oregon Democratic Sen. Ron Wyden has labeled such talk a "middle-class con job."
Indeed, it is just that. There's no way that Congress can cut corporate taxes from 35 to 20 percent while also cutting some small-business taxes and not make up for that lost revenue by eating into middle-class tax provisions like deducting state sales and income taxes (important to Wisconsin's middle class) and reducing property tax and mortgage interest. Tax rates may be reduced, but middle-class taxes paid will change very little and in the case of an estimated 13 million Americans will actually increase.
Just like the Republicans tried with their health care plan, their so-called tax reform is laden with gimmicks. What's needed is for members of both parties to sit down and do away with the loopholes that have been built into the system that allow corporations to escape taxes altogether, give faux political nonprofits tax-free money, and allow millionaires and billionaires to claim deductions that no members of the middle class can claim.
And let's not forget that big elephant in the room. How is it that at a time when the federal deficit is nearly $20 trillion we're even talking about reducing taxes that are going to leave a $1.5 trillion budget gap? Shouldn't we instead be reforming the system to make it more fair to all while maintaining the revenue stream to at least attempt to balance the budget?
Because, let's be honest, that trickle-down idea is never going to work.
Dave Zweifel is editor emeritus of The Capital Times. firstname.lastname@example.org and on Twitter @DaveZweifel
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