Republicans in Congress passed a huge tax bill Wednesday, in what is being hailed as a major win for President Donald Trump and his party. In time, however, it very likely will be remembered as an ignominious moment for Republicans.
To be sure, there will be some unmitigated winners. The bill is a victory for wealthy heirs, who will no longer have to pay estate taxes on inheritances worth up to $22 million. It helps tax dodgers and their lawyers, who will have some potentially huge new loopholes to exploit. Because the drafting process was so hasty and sloppy, no doubt there are many hidden in the text that even its authors do not realize are there.
The bill is a victory for corporations that look like the Trump Organization, the president’s privately held real estate business. “Pass-through” businesses like many of those within the Trump Organization get a new tax break. Other provisions single out real estate for special consideration in the tax code. The public can only guess at how much the president will personally benefit from the tax bill he is about to sign, because he has defied decades of bipartisan tradition by refusing to release his tax returns. In that sense, the bill is also a win for nontransparent government.
The bill is a victory for the discredited theory of trickle-down economics. It embodies the notion that big tax cuts for the wealthy will benefit low- and middle-class workers rather than simply enrich the already well-off.
The bill is a win for know-nothing anti-intellectualism. At every stage, Republicans have ignored or attacked independent experts warning them that their bill was unwise. They have undermined scorekeepers such as the Congressional Budget Office and the professional staff of the Joint Committee on Taxation because they did not like what these nonpartisan institutions said about their plans.
The bill is a victory for corrosive partisanship. Republicans could have hashed out a better, bipartisan plan, but they never seriously tried. Instead, they added to the bill a stealth repeal of a key piece of Obamacare and a provision allowing drilling in the Arctic National Wildlife Refuge.
Most of all, the bill is a victory for fiscal irresponsibility. Some of its provisions, such as lowering the corporate tax rate, would have been worthwhile if they had been paid for by closing loopholes or raising other federal revenue. Instead, the bill will make the nation’s debt trajectory even worse, by a trillion-plus dollars, even after accounting for new economic growth. The bill’s mild potential effects on competitiveness and growth are not worth such a steep price tag.
Cleaning up this mess will take years but must start now. The bill’s Obamacare rollback requires immediate passage of legislation to limit the damage to already shaky health care insurance markets, preferably a significantly pumped-up version of a plan Sens. Susan Collins, R-Maine, and Bill Nelson, D-Fla., have already negotiated.
A technical-corrections bill may be needed to close unintentional loopholes, and government programs will have to be protected from automatic cuts triggered by the GOP tax policy’s fiscal irresponsibility. Longer term, the picture is bleaker. Taxes will have to rise and spending on entitlement programs drop to fix sharply unbalanced budgets to come. This is the “victory” Republicans just handed the country.
FROM AN EDITORIAL IN THE WASHINGTON POST