Republicans have shown some propensity for learning from their colossal failures at legislating as of late. Unfortunately for the GOP, it appears that a hard lesson on governing is quickly becoming a miseducation on the basics of politics.
After twice failing to repeal Obamacare, Republicans in Congress have shifted their approach while pitching the first major overhaul of the U.S. tax code in 30 years. For starters, they unveiled their package of massive cuts for corporations and the wealthiest households in America just as President Donald Trump was preparing to leave the country for a 12-day trek across Asia. (He can still tweet — hello Chinese censors — but that’s hardly as damaging as a closed-door bullying session on Capitol Hill).
Presumably, after understanding that massive health care cuts that would have disproportionately affected red states led to their repeated failures to repeal the Affordable Care Act, Republicans have now decided to target blue states to bear the brunt of the pain from their proposed tax cuts.
The GOP’s $1.5 trillion tax plan, the party's second attempt at major legislation since regaining singular control of the federal government last January, was unveiled by House lawmakers last Thursday. The “Tax Cuts and Jobs Act” is built around a permanent reduction of the corporate tax rate to 20 percent, as favored by the White House. The $100 billion annual corporate tax slash would not be financed by draconian spending cuts, (which Republicans are eager to avoid, after the sequester-and-shutdown fiasco a few years back), but rather by supply-side deficit spending.
Their tired trickle-down theory is boosted, this time around, by fiscal policy borrowed from former Kansas Gov. Sam Brownback’s failed experiment. Aside from the giveaway to corporations, another hallmark of the GOP tax cut is a rate reduction, from 39.6 percent to 25 percent, for so-called pass-through businesses whose profits are passed to owners and taxed as individual income instead of as corporate income.
There are more than 500 businesses owned by Donald Trump that will see tens of millions of dollars in tax savings under the GOP’s proposal. Perhaps that’s why the White House has once again trotted out Ivanka Trump to add a Vanna White sheen to an otherwise bad-smelling piece of legislation.
Although House Republicans quietly snubbed the eldest Trump daughter when they rejected her much-hyped proposal to double the child tax credit and make it refundable, Ivanka has still enlisted her entire family to turn up the charm offensive on behalf of tax cuts for the wealthy.
Ivanka and her husband Jared Kushner recently hosted several Republican senators at their posh Washington home to talk tax cuts over wine.
“Arabella, the couple’s elementary-age daughter, wrote the place cards,” USA Today reported.
Ivanka Trump had lobbied Republicans to expand the child tax credit to at least $2,000 and make it refundable. It didn't work.
Her inability to get vital tax relief for millions of Americans — an effort she’s publicly backed since before her father accepted the Republican nomination — certainly doesn’t bode well for Ivanka’s ability to sell the more controversial aspects of the GOP’s tax plan.
Under the current proposal, taxpayers would no longer be allowed to deduct state and city income taxes from their federal tax bill — a deduction that flows mostly to the higher-taxed blue states. According to an analysis by the nonpartisan Tax Foundation, six states — California, New York, New Jersey, Illinois, Texas and Pennsylvania — claim more than half of deductions for state and local taxes, while about one-fifth of all taxpayers claim the state and local tax deduction, according to the Pew Charitable Trusts. Unfortunately for Ivanka and the White House, 34 House Republicans represent these high-tax states.
“I view it as a geographic redistribution of wealth,” Rep. Lee Zeldin, R-N.Y., told the New York Times. “You’re taking more money from a state like New York, to pay for a deeper tax cut elsewhere.” New Jersey’s Republican gubernatorial candidate, Lt. Gov. Kim Guadagno, wrapped up her campaign by railing against the elimination of the deduction, calling on the state’s congressional delegation to “condemn it.”
No matter how much Ivanka wines and dines Republicans, the GOP proposal to raise revenue by targeting high-tax states dominated by Democrats will only endanger the most vulnerable Republicans in 2018.
"There will be changes between the two and changes in the course of the legislative process,” Vice President Mike Pence, who has also been commissioned by the White House to sell the GOP plan on Capitol Hill, promised on Sunday. In that case, Ivanka’s tour across America will likely end just as it began: a loser. The ultimate lesson for Republicans will remain unlearned: There's no point polishing a turd.