Working digits no longer necessary
The big tax plan is done and the Republicans are taking their victory lap. They love them some Trump today. But according to GOP apostate Bruce Bartlett, they may have just had their way with him and have no more use for his (very tiny) "working digits."
President Trump believes he has just won a great victory in Congress with final passage of huge tax cuts in sight. He should not be so cheerful; it could mark the beginning of the end for him and his party.
The reason is that signing the tax cuts and some judicial appointments were the only things Republicans in Congress ever needed Trump for. Republican insider Grover Norquist has long said that Republican presidents are just nuisances because they tend to muck up the finely tuned plans that Republicans in Congress have been working on for decades to downsize government. The perfect Republican president, he has always said, has enough working digits to sign his name on legislation and that’s it.
Trump himself is a perfect example of how Republican presidents screw things up. Republicans in Congress had for years a clever plan to abolish Obamacare and replace it with nothing. Of course, they always said they had a plan to replace it, but no one was ever told what it was. That’s because there was no replacement; it was all a lie, a fig leaf to get rid of Obamacare and, especially, the taxes that financed it.
Unfortunately, no one told Trump. He thought congressional Republicans had an Obamacare replacement ready to go the moment he took office. Trump messed up the plan by insisting that the Obamacare replacement be enacted simultaneously with the repeal legislation.
Except, there was no replacement and never any intention of having one. In the end, the Republicans failed.
Desperate for a win, Team GOP scheduled a game with its easiest opponent, the tax system. Again, there was no bill, and neither Trump nor Republicans in Congress paid the slightest attention to his campaign's vague and contradictory promises.
Republicans also abandoned any pretense of doing actual tax reform. It appears that they simply sent out a call to every lobbyist in town asking for a tax wish list. When they added up all the provisions there was about $6 trillion in lost revenues over a decade. Then Republicans cast about for tax increases to reduce the net revenue loss to $1.5 trillion, the maximum loss they thought they could get away with.
The biggest revenue raiser was abolition of the deduction for state and local taxes. This provision mainly helps the states with relatively high taxes and large public sectors; namely, the blue or Democratically controlled states such as California. The reason is that federal deductibility lowers the effective burden of state and local taxes by the amount of one’s tax bracket. Republicans have long believed that this encourages excessive state spending and taxes.
Eventually, Republicans found $4.5 trillion in tax increases that would fall mainly on Democrats or that undermine Democratic programs such as Obamacare.
The extraordinary thing about the tax bill is that it has little support among the general public. Numerous polls have found roughly two-to-one opposition. This is quite amazing because tax cuts are like Christmas — everyone gets a present.
Republicans have been obsessed with getting the tax cuts over the finish line — racing to complete it in the dead of night because they can see the handwriting on the wall. Recent elections and polling data show Trump and the GOP with among the lowest approval ratings ever recorded.