GOP resorts to lying about its tax bill (part two)

Economist and New York Times columnist Paul Krugman hascbeen on fire the past couple of weeks exposing the lies of the GOP tax bills. Last week he wrote, Everybody Hates the Trump Tax Plan and blogged Days of Greed and Desperation (excerpt):

The House tax bill is wildly regressive; the Senate bill actually raises taxes on most families, while including a special tax break for private planes. In effect, the GOP is giving middle-class Americans a giant middle finger. What’s going on?

A large part of the answer, I’d suggest, is that many Republicans now see themselves and/or their party in such dire straits that they’re no longer even trying to improve their future electoral position; instead, it’s all about grabbing as much for their big donors while they still can. Freedom’s just another word for nothing left to lose; in the GOP’s case, that means the freedom to be the party of, by, and for oligarchs they always wanted to be.

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So their incentive is to stuff everything the donors want, no matter how outrageous — tax hikes on most of the population, tax breaks on private planes — through the sausage grinder right now.

I have to admit, I didn’t see this coming. And there’s a pretty good chance that this desperate grab will fail — remember, it only takes three Republican Senators with a shred of principle. But that’s where we are.

This week the professor writes, Lies, Incoherence and Rage on Tax Cuts:

One thing you can count on in 21st-century U.S. politics is that Republicans will lie about taxes. They did it under George W. Bush, they did it under Barack Obama and they’re still doing it under Donald Trump.

Yet this time is different. It’s not just that the lies have gotten even more brazen. There’s now a combination of incoherence and rage that we, or at least I, haven’t seen before. These days, they can’t even seem to get their fake story straight — and they literally start yelling obscenities when someone tries to point out the facts.

G.O.P. lies about taxes generally involve two issues: who is hurt or helped by tax changes, and what these changes will do to the budget.

Thus, when George W. Bush cut taxes in 2001 and 2003, he and his party repeatedly insisted that the tax cuts were primarily for the middle class. In fact, while there were some middle-class tax breaks in the package, such as an increase in the child tax credit, these were dwarfed by cuts in tax rates on high incomes, reduced taxes on dividends and repeal of the estate tax. Over all, the richest 1 percent saw a much larger increase in after-tax income than middle-class families did.

At the same time, the Bush administration used a series of gimmicks to hide the true fiscal cost of the plan, such as delaying the implementation of some tax cuts while pretending that others would expire when the actual intention was to make them permanent.

When Obama took office, these tricks were simply flipped on their head. Republicans insisted, falsely, that Obama had imposed a “massive tax increase” on the middle class; in fact, for the most part he actually cut middle-class taxes. Meanwhile, they insisted that the surge in the budget deficit caused by the aftermath of the 2008 financial crisis was permanent, and ridiculed the Obama administration’s claims that deficits would fall sharply once crisis spending ended and tax receipts recovered; in fact, that’s exactly what happened.

So what’s different this time? As in the Bush years, Republicans are claiming to be offering a middle-class tax cut. But where Bush truly was cutting taxes on the middle class, just much less than he was on the wealthy, current Republican plans would raise those taxes on many lower- and middle-income families, even as they go down for the wealthy. (Steven Mnuchin, the Treasury secretary, claims that only “million-dollar earners”would see tax increases. This is the opposite of the truth.)

Oh, and a memo to journalists: If you play it safe by reporting this as “Democrats say” that middle-class taxes will go up, you’re misleading your readers: Those estimates come from the Joint Committee on Taxation, Congress’s own nonpartisan scorekeeper.

How can Republicans like Paul Ryan, the speaker of the House, pretend to be helping the middle class? It depends crucially on a new kind of budget gimmick: Both the House and Senate tax-cut bills do contain some middle-class tax breaks — but only for the first few years. Then they expire.

Take one of Ryan’s favorite examples, a family with two children and earning $59,000 a year. That family would indeed get a tax break next year. But the break would rapidly dwindle and turn into a tax increase by 2024.

The Republican response is to claim that these tax breaks wouldn’t really expire, that Congress would eventually renew them. That’s quite doubtful — and even if true, it means that the tax plans would add much more to the national debt than the G.O.P. admits. Which brings me to the whole budget deficit issue.

Not long ago, leading Republicans claimed to be deeply concerned about budget deficits. Only fools and centrists took the Republicans seriously. Still, the abrupt shift to nonchalance about adding trillions to the debt in order to cut taxes on corporations and the wealthy is causing a bit of whiplash even among cynics. How do they justify the shift?

Well, they don’t seem to have settled on a story. Mnuchin keeps asserting that tax cuts will pay for themselves, going so far as to claim (falsely) that Treasury has released a study showing this. Mick Mulvaney, the budget director, cheerfully acknowledges that they’re using gimmicks to pass a bill that permanently cuts taxes on corporations, and not to worry. Whatever works, it seems.

So we’re really looking at an unprecedented level of dishonesty here. But what happens when you try to explain what’s going on? When Senator Sherrod Brown tried to point out, correctly, that the Senate G.O.P.’s tax bill heavily favors the rich, Senator Orrin Hatch exploded, calling it “bull crap” and asserting that he grew up poor (which is relevant why, exactly?)

Sorry, but this isn’t the righteous anger of a man falsely accused of wrongdoing. It’s the rage con men always exhibit when caught out in their con.

But what’s the con about? The very incoherence of the arguments Republicans are making for their plans shows that it’s not about helping the economy, let alone ordinary families. It really is about making the rich richer, at everyone else’s expense. If this be bull crap, make the most of it.

The Washington Post editorializes that “Senators from whom the public should expect more — such as Susan Collins (R-Maine), Bob Corker (R-Tenn.), Jeff Flake (R-Ariz.), John McCain (R-Ariz.) and Lisa Murkowski (R-Alaska) — should finally denounce this tax nonsense:

MICK MULVANEY, the phony deficit hawk President Trump tapped to oversee the nation’s budget, all but admitted on Sunday that the GOP tax plan currently before the Senate is built on fiction.

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Mr. Mulvaney, the head of the White House’s Office of Management and Budget, said on NBC’s “Meet the Press” that Republicans are trying to “game the system” by pretending that expensive tax cuts will expire in several years, arguing that the pretense is necessary to “shoehorn the bill into the rules” of the Senate. “A lot of this is a gimmick,” he said.

Yet those rules exist for a reason — to prevent senators from busting the federal budget. The Senate GOP bill would lower personal tax rates but schedule them to tick back up in future years. This maneuver cuts the plan’s nominal sticker price to $1.5 trillion. But Mr. Mulvaney and other Republicans reason that, once written into the law, Congress would not allow these provisions to sunset. So the Senate Republican tax plan would cost $1.5 trillion on paper — already too much — but a lot more in reality.

This is just one indication that the plan directly contradicts the specific promise Mr. Corker made to oppose any tax bill that would “add one penny” to the deficit, not to mention the general concern that other lawmakers have expressed about the nation’s deteriorating finances.

Mr. Mulvaney and many other Republicans argue that the bill’s tax cuts would spur economic growth, in turn increasing federal revenue, and therefore pay for themselves. No credible analysis substantiates this fantasy. But there are many that predict fiscal ruin. The nonpartisan Tax Policy Center released one Monday. Assessing the House version of the plan and accounting for the economic growth its tax cuts would induce, the analysts found that growth would offset only about 12 percent of the plan’s cost over the first decade. After an initial economic boost, bigger deficits and rising interest rates would drag on the economy.

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In fact, the Senate bill would load up on debt to provide upper-income tax breaks that no serious assessment would put on a list of national priorities. Curbing the estate tax, for example, would do little other than enrich well-off heirs. Though dropping the corporate tax rate could make the United States a somewhat more attractive place to do business, it is not worth adding substantially to the debt.

This is a gut-check moment for any senator who has ever claimed to care about the debt. The Senate is on the verge of further burdening future generations that already face a big bill from decades of budgetary recklessness. The GOP tax bill is a charade. In case anyone thought otherwise, Mr. Mulvaney just confirmed it.

Economist Jared Bernstein makes a similar point. Attention, fence-sitting Republican senators: Here’s what’s at stake in the tax vote (excerpt):

When I listen to some of the Republican fence-sitting senators, including Susan Collins (Maine), Jeff Flake (Ariz.), John McCain (Ariz.), Bob Corker (Tenn.) and Lisa Murkowski (Alaska), I often hear rational, thoughtful voices that would not be willing to provide the marginal vote to support the outcomes noted above. Supporting the plan is simply inconsistent with many things they’ve said and with the visions they’ve espoused.

Of course, the central point of this little essay is that we live in an era in which such inconsistencies are the norm, an era characterized by a constant fuselage of lies from those in power, amplified by social media, where facts are just as unwelcome as a deliberative process that could, at least in theory, deliver real tax reform. These senators, thus, have a unique opportunity to “walk their talk,” to stand up to these forces that are so quickly eroding treasured institutions.

I don’t mean to be melodramatic, but that’s what is at stake here, and any politician who shoves these realities aside to meet the demands of their donors or the exigencies of party politics must question whether that’s what they came here to do. If the answer is “yes,” then I humbly submit that they are serving neither their constituents nor the country.

Exactly. So what’s it going to be Sens. McCain and Flake? Country before party? Or GOP donors and politics before country? The time has come for your “Profiles In Courage” moment. Are you ready for your closeup?