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The GOP's Grotesque Tax Bill Is a Plan Almost Nobody Can Love

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The GOP's Grotesque Tax Bill Is a Plan Almost Nobody Can Love

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For years the Republican Party has failed to address a fundamental problem with their policy proposals, be it on health care or taxes: The supposed beneficiaries tend to dislike their plans when they find out what they actually are.

The new House Republican tax plan unveiled on Thursday will be no different, except for the parts that are even worse than expected.

In broad strokes, the House plan represents another giveaway to wealthy and corporate interests, thinly masked with only the most half-hearted of populist gestures. It reduces the number of tax brackets and raises the thresholds for higher brackets, which will be most rewarding for couples with income in the high six figures. Average citizens get crumbs like a $600 addition to the child tax credit (six whole weeks of daycare, only 46 to go!); an eventual end to the estate tax cuts roughly $270 billion in tax revenues over a decade.

At his rallies, President Trump always echoed the by-now-familiar appeal of an estate tax repeal to the American farmer, trading in the kind of nostalgia that calls to mind soot-faced dust farmers tending to skeleton orchards in fields of sepia-toned pain straight out of James Agee. And now, farmers breaking sod on iron rations will no longer pay taxes on their family farms valued at above $5.49 million; they will only pay taxes on estates worth more than $11 million. (The tax then disappears in six years.)

Plus, as a side effect of farm relief, the estate tax repeal could save Trump's heirs over $1 billion.

The plan also calls for reducing the corporate tax rate from 35 percent to 20 percent — the unemployed white working-class voter dream. Democrats argue (and Republicans know) that large corporations almost never pay anything close to 35 percent in taxes because of loopholes that, on some occasions, result in net negative taxation. Conservatives generally counter that the U.S. corporate rate is "the highest in the world" (true, among OECD nations, although not by much), and that reduction will spur growth — though that argument stumbles on the idea that a reduction on paper alone, without a complete elimination of loopholes and deductions, won't necessarily spur growth in the "real world" where everyone was getting a discount anyway.

The unexpected gouging — from a bill that kicks a $1.51 trillion hole in the budget and will likely not get the vote of a single Democrat — hits many voters too close to home, if that home is in a blue state or city: Republicans are targeting the mortgage interest deduction and deductions on state and local taxes as a way to offset the tax cuts for the wealthy few and corporations.

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The House GOP plan caps the mortgage interest deduction on future home purchases at $500,000, down from $1 million. Leaving aside that the deduction is already a tax benefit that unfairly privileges (usually comparatively wealthy) homeowners over (usually comparatively less wealthy) renters, this cap would on the surface seem to contradict the GOP's pro-growth strategy by reducing buying power in the real estate market.

But — and this doesn't seem coincidental — the provision neatly targets homeowners in blue districts. While even $400,000 is enough to build a McXanadu in rural red states, $500,000 was already the cost of an average-sized Silicon Valley ranch house 25 years ago and will get you a lovely walk-in closet in New York City today. Buyers in blue cities are likely to pay more taxes under this plan, merely by default.

Still, the $1.51 trillion hole from the other tax cuts isn't going to get plugged with the proceeds of higher taxes on urban real estate owners alone, which is why the House plan also includes more tax deduction excisions. State and local tax deductions will also be capped at $10,000 on property taxes, a penalty also likelier to be borne by blue-state residents.

Meanwhile, since that's not enough, the medical-expense deduction would also vanish from this plan, though it's a deduction that only the sickest (and not-wealthy) can really take. Perhaps this is just spite: Thwarted in their ambition to charge you more money for less health care the GOP plans to eliminate this deduction while also sabotaging state attempts to improve insurance markets, advertising for ACA enrollment and cost-sharing reduction payments.

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The GOP's operating communications strategy seems to be a word game based on the idea that to cut a tax deduction isn't a tax hike, which would be news to any GOP representative under a Democratic administration or majority. (That, and evidently Democratic voters can't count as victims of tax increases.)

Much like the secretive, chockablock Obamacare repeal, it's almost impossible to think of anyone who would like this bill as a whole in its current form. Republican lawmakers have no response other than deciding polls are wrong, don't represent their constituents or might as well not exist. For almost everyone else, there is just the manifest realization that conservative tax policy does not benefit them personally in any real way; the idea of tax cuts is always more popular than the reality that the biggest tax cuts will always go to the richest people.

That is, in the end, the reason that a GOP-controlled government can only craft these bills in secret, release the actual legislative language quickly and hope that they can be voted on before anyone threatens them with something so sinister as examination using tools so grotesque as math. It's the same reason why late-stage syphilitics used to wear masks in public in the middle ages: Because they know they have produced something horrible on its face, and they know your first and final response will be revulsion.

Jeb Lund is a former political columnist and reporter for Rolling Stone and The Guardian. He has a terrible podcast.

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