Bruce Bartlett, writing in the Washington Post, reminds us of the GOP’s “real” intentions:
…for decades, conservative intellectuals have pushed for big tax cuts; less to grow the economy and more because they want to “starve the beast.” They want to force a major overall spending cut that would be a political non-starter without first passing a tax cut that creates a deficit so large, something must be done about it. Spending cuts must be enacted, then, as they would be presented as the only way to pay for the already passed tax cut’s lost revenue.
Americans for Tax Reform, for instance, led by starve-the-beast enforcer Grover Norquist, is quite open about its goals.
I don’t doubt that this is what Norquist intends, or that there are even still a few Republicans who truly believe in the efficacy of his approach. Overall, though, it’s been a miserable failure on all fronts. It has failed at all its goals and is likely to continue to do so. The current tax reform measures recognize this, which is why both Norquist and his allies in the press have been less than glowing about the bills moving through the House and Senate, despite the promise of tax cuts. Jake Novak writes:
And if anyone in America is looking to the GOP to offer a contrast to “Big Government” Democrats obsessed with class warfare, they aren’t getting that in the tax reform bill so far….
But in reality, there’s too much in the bill that the Democrats would be proud to include themselves. Chief among them is a new set of quirky surcharges that creates an effective new tax rate of 45.6 percent for those who earn more than $1 million in taxable income per year.
The Wall Street Journal Editorial Board had the following to say:
The big disappointment is in individual tax rates. The good news is the blueprint would fold seven brackets into three—12%, 25%, 35%—and double the standard deduction to $12,000 for individuals and $24,000 for married couples. The increased deduction reduces the need for carve-outs that muck up the code, and millions will be able to file on a postcard.
But the outline threatens an undefined additional rate on high earners to ensure the new code is “as least as progressive” as the current system, which sounds like a talking point from Nancy Pelosi.
Even more to the point, however, is that increasing deficits have not been accompanied by reductions in spending. To the contrary, the Bush Tax cuts went hand-in-hand with Medicare Part D. The massive deficits from the 2008 recession, were followed up by Obamacare. My best bet, and what Whitehouse CEA Kevin Hassett signaled last week, is that after tax reform, the President is going to try to spend even more money on infrastructure. There are no starving beasts anywhere in our immediate future.