What? More Tax Cuts?
Terry H. Schwadron
Aug. 2, 2018
It’s been a busy week for growing public outrage in Washington, but among the provocative tweaks at Iran, the braggadocio of calling for Atty. Gen. Jeff Sessions to shut down Special Counsel Robert S. Mueller III, the appointment of a guy who defended Dow Chemical to oversee toxic waste policy, the unfortunate winner of the week so far is President Trump’s sneaky and ill-thought plan for another round of tax cuts.
This time around, there is no special or fake middle-class glitz on the proposal; rather, it is a direct $100 million giveaway to the wealthy. Some independent analyses conclude that more than 97% would go to the nation’s top 10% of earners; two-thirds to the top 0.1%.
As a New York Times editorial said wryly, “This did the final vestiges of this president’s pretty little narrative about being a populist hero.”
Having gotten his way with one set of tax cuts that heavily favored corporations and the rich, the president wants another bite at the same apple by offering a regulatory Treasury Department gimmick to lower capital gains taxes on investments. Treasury Secretary Steve Mnuchin to department officials to explore allowing investors to take inflation into account when calculating capital gains — reducing the tax, and, magically taking attention away from other, more critical concerns.
What the president apparently has not done is to look at what happened with the first round of tax cuts — those tax cuts that his Republican brethren in Congress so hungrily ate up. Contrary to what was said at the time, the biggest advantages went to corporations and to the richest people in the country, and the biggest effects have been to enable companies to retire debt, buy back their own stock, and to a much lesser degree, increase investments in their plants. Last on the list has been any trickle-down wage increase.
Plus, the tax cuts went unpaid for by the Republican-majority Congress, so the federal debt has boomed this year. Trump may talk a lot about reducing overall federal spending, but the tax cuts and the whopping increase in military spending have put the country much further in the hole — ironically to China, who is holding the debt.
That’s right, the same China that we want to beat around the ears with strict economic tariffs on steel, aluminum and now many, many more American products, that China still owns the bulk of U.S. debt. Now Trump comes along with another proposed tax reduction to further buoy the American economy and productivity numbers, obviously willing (or more) to increase the U.S. debt to the country identified as our largest economic foe.
Call me crazy, but I find this failure to connect the dots in all this a shameful failure.
But that’s not the worst part of this deal. The worst part is that Trump wants to skip the nasty step of waiting for Congress to pass the appropriate legislation to allow the tax discounts. Instead, he says he wants to accomplish this tax cut by regulatory roulette that is not exactly legal, and will leave the policy open to legal challenge.
As pointed out in policies affecting immigration, ethics, health care, racial equity, science and environment, housing and education, it feels as if it is time to call in the authoritarianism police. It’s not just the bad policy involved, it is the brusque, let-them-eat-cake manner to which Trump has become accustomed.
That attitude blurted itself out into the open at a rally this week where Trump made the case for stricter voter identification by comparing it to grocery purchases. “If you go out and want to buy groceries, you need a picture on a card, you need ID. You go out and you want to buy anything, you need ID and need your picture. In this country, the only time you don’t need it in many cases is when you want to vote for a president,” he said.
That Trump has met with scorn on social media as people noted, correctly, that they can successfully shop at their local supermarket without an ID, it was is a mark of how dangerously out of touch this president remains.
What makes the president think he can change federal tax policy on a personal whim without having to go through Congress — a body whose Republican majority has already shown itself favorably disposed to consider more tax cuts? It is continuing evidence of a perilous political path. No one is suggesting that these actions are illegal, but they are disrespectful of any sense of order and of checks and balances.
It is the same political snootiness that allows the president to isolate himself from any learning, any dissent, any opposition to his own gut, whether the issue be foreign affairs, domestic regulations or issues like the role of science.
What the tax cuts represent is not so much a goad to an already juiced economy, but the arrogance of an isolated, non-thinking, emotional autocrat. The Times editorial: “Beyond pure greed and a desire to suck up to the 0.1%, it’s hard to see any real-world logic behind this move.”
The tax cut proposal is bad. The way of Trump in floating the proposal makes it despicable.