After crashing and burning in their quest to repeal Obamacare, Republicans have turned to their perennial passion: corporate and personal tax cuts. President Donald Trump has promised “the biggest tax cut in history,” and the GOP is ready to help him deliver.
According to early outlines of various Republican plans, the party will push for—wait for it—tax cuts skewed to the very rich along with deep cuts in corporate taxes. Trump wants the corporate tax rate to go from a nominal rate of 35 percent to 15 percent. The Republicans sales pitch invokes notions of magical tax-cut created growth, competitiveness, and other fantasies that will supposedly “cover” the cost of the tax cuts—or not. The Trump administration has at times floated plans that would simply enact deficit-financed tax cuts for 10 or even 20 years, which would in turn put tremendous pressure on safety-net programs.
Global corporations are also looking to avoid the bulk of the taxes owed on profits reported abroad, while ending any taxation on such profits in the future. The intended result of this so-called “territorial” tax system—in addition to the cash benefits for contributors and favored interests—will be deepened public austerity, with growing pressure for cuts in Medicare, Medicaid, Social Security, and education.
Democrats, their spines stiffened by massive popular mobilizations, displayed remarkable unity and grit in opposing the Republican push to repeal and replace Obamacare. But how will Democrats respond to this new grotesquerie?
Senate minority leader Chuck Schumer, who has worked tirelessly to shepherd his vulnerable flock of Senators, acted quickly. On Tuesday, he joined with Senator Ron Wyden, ranking Democrat on the Senate Finance Committee, to release a letter signed by 45 of the 48 Democrats in the Senate that set forth Democratic parameters on tax reform. (The three senators who did not sign—Heidi Heitkamp, Joe Manchin, and Joe Donnelly—are all up for reelection in states that Trump won. Their abstention makes them leading Republican targets for the coming Senate debate.)
The letter invites Republicans to join in a bipartisan tax-reform effort, and lays out the Democratic conditions for cooperation. No tax cuts for the top 1 percent. No increase in burdens placed on the middle class. No “deficit-financed tax cuts, which would endanger critical programs like Medicare, Medicaid, Social Security, and public investments of the future.” And, of course, it demands working in regular order, rather than invoking arcane budget-resolution procedures that would enable Republicans to pass a measure with Republican votes only.