By Rohit Reddy
Business leaders called it a “moral abomination” and the wrong way to spur wage growth. Experts argued it was divisive policymaking that penalized blue states because they did not vote for Trump. Others noted secrecy and lack of hearings showed contempt for democracy and American norms of governance. Still Republicans rammed through Congress a tax bill that is so unpopular and corrupt some are calling it the worst piece of legislation in modern U.S. history.
What is there to learn from GOP tax bill’s passage?
The Tax Bill Revealed Republicans’ Values
Forget passing aid package to assist communities devastated by natural disasters in Puerto Rico or the U.S. Virgin Islands; delay the simple act of reauthorizing the CHIP health insurance program that covers 9 million children; leave in limbo hundreds of thousands of Dreamers who need protection from deportation. Apparently, nothing is more important than raising taxes on millions of Americans and increasing the deficit by $1.4 trillion in order to fund tax cuts for corporations and the ultra-rich. Aside from a handful of individuals who evidence some trace of human decency, the modern Republican party has shown a demonstrable contempt for working people, democratic norms, and fiscal responsibility. What I find shocking is that Congressional Republicans value tax cuts for foreign investors over American families.
Congressional Republicans are Waging War on California
California is special. It is a global leader culturally and economically. The way California does things may irk conservatives, but in our federal structure, states have the leeway to experiment and pursue public policies that reflect the will of their residents. So it is profoundly divisive and un-American that the Republican party is using taxing policy to undermine California’s economic competitiveness. After all, the lower cap on the mortgage interest deduction will worsen housing affordability. Severely limiting ability to deduct state income and property taxes will make living in California more expensive, which means companies will have harder time retaining workers or attracting workers to move to the state.
Congressional Republicans singled out for the highest tax increases upper middle class households in California. They know that households that earn more than $200,000 a year (6.1% of tax filers) contribute the lion’s share of tax revenues (61% of all local tax receipts) to the state; increasing their tax burden will either get them to leave the state or pressure the state to limit spending, thereby hurting education and health programs.
California’s Republicans Have Betrayed Their State
It doesn’t matter whether you’re conservative or liberal, most Californians will lose from the tax bill. Congressional Republicans will argue that most of their constituents will get a modest tax cut in 2019. But after that, the reality of depressed home prices, repeal of deductibility of state income and property taxes, job losses from California’s diminished economic competitiveness start catching up, and the bill is an open wound to our economy. To paraphrase Ivanka Trump (who paraphrased Dante), there is a special place in hell for those who betray their people. All Californians must unite to vote the traitors out.
Don’t despair: There are some silver linings
Public outrage over earlier versions of the tax bill tempered some of its crueler parts: deductions and credits for grad students and adopting parents will remain, as will the ability to deduct student loan interest and high medical expenses. And some features of the bill, such as more generous child tax credits, increasing the standard deduction, and the lower margin tax rate, will benefit many Americans. Last, let’s not forget that no Democrat in either chamber of Congress voted for the bill. For a party of such diverse views, that’s huge.
The truth is I am bummed the bill passed. I know it will hurt a lot of Americans and exacerbate income inequality in our country. But recent wins in Virginia, Alabama, the energy and inspiring work of Indivisibles and so, so many other things make me realize: there is little that Congressional Republicans are doing that can’t be reversed if – when – we take back Congress.
Rohit Reddy is a marketing professional, who has a particular interest in bringing facts and evidence to inform decision-making. He resides in Alameda with his wife and two adorable little boys.