It’s no surprise most Utahns believe congressional leaders’ claims about the tax plans, as a recent Dan Jones poll found. The poll asked, "With which side do you most agree — Republicans’ claims the reforms will cut taxes for the middle class and make the tax system simpler and fairer or Democrats’ claims the proposals will mostly benefit the rich?" The poll did not ask participants if they understood the content or impact of the tax proposals.
Tax policy, with all its moving parts, is hard to understand. How many of us can describe the structural changes and differential impacts by income and family size and type of tax? Do we even know how the plans will impact our own families? Plus, we have two plans to consider, one in the House and one in the Senate. Provisions in each bill change daily, with no time to thoughtfully consider impacts. Under such pressure, the public defers to tribalism — "tribalism of party” — choosing to support the position of whichever party claims their allegiance.
If tribalism of party were to give way to rational inquiry, we would see that the plans benefit the wealthy and corporations at the expense of middle-class families. Large families will pay even more over time. Charitable giving and high out-of-pocket medical expenses will no longer be tax-deductible.
Utah’s congressional delegation is determined to pass a GOP tax plan before the year is out, even if the details threaten the fundamental values of our own tribe in the cultural sense: respect for middle-class families, fiscal prudence, charitable giving, compassion for the sick, etc. Somehow tribalism of party trumps cultural tribalism, and it’s not what the typical moderate Utahn should be willing to support if they stopped to learn more about the details in the tax plans.
Is there even room to contemplate the ways in which permanent cuts in corporate tax rates benefit the wealthy individuals who run corporations? What about the impact of repealing the mandate to carry health insurance? This has been incorporated in the Senate’s plan as if it were some sort of sideshow, yet it could sink the entire Affordable Care Act and may be intended to do just that.
Public hearings on the proposed tax plans would clarify the proposed changes and impacts, but we’ve stopped asking for those. So why the mad rush? There’s the pressure to accomplish something in the first year of a GOP-led Congress, but that’s only part of it. I’m guessing it’s more about pushing the tax plans through before any more details come to light. The Congressional Budget Office and Joint Committee on Taxation are hard at work on dynamic scoring of the proposals to test tax plan supporters’ claims that greater macroeconomic growth will offset the deficit — but they need more time.
Meanwhile, the list of intended and unintended consequences grows longer. For example, the current proposals add to the substantial tax avoidance opportunity in our current tax system. As a result, corporations will shift even more profits overseas and revenues will be less than anticipated. Who will pay the price? Trump’s base and others for whom voting has devolved to a tribal activity (the bad kind).
Reagan bent over backward to forge a bipartisan consensus on his 1986 tax reforms. After a painstaking three-year process, the final plan incorporated the hallmarks of sound tax policy: It closed tax loopholes, broadened the base and did not further inflate the deficit. There is a way to do this without worsening income inequalities, says T.R. Reid in "A Fine Mess," but it takes time — more time than party tribalism has.
Judi Hilman is the president of Policy Catalyst (www.policycatalyst.org).