There are some good reasons to look at the coming tax reform push and see how it could suffer the same fate that health-care reform did. But I don’t think it will. Before I explain why, let’s consider the case for why tax reform might fail.
The primary stumbling block is the lack of Republican unity on the issue. It’s important to keep in mind that “tax reform” and “tax cuts” are not the same thing. What Republicans want to undertake isn’t just some cuts, it’s a complete overhaul of the tax system. There’s a reason this happens only once every few decades and takes years to negotiate: It’s incredibly complicated and inevitably results in lots of powerful interests at odds with one another. Republicans often complain about the complexity of the tax code, but it didn’t get so long because socialist Democrats kept coming up with new ways for bureaucrats to control your life. The tax code is long because it has been written in large part by special interests, especially corporations, shaping it to suit their needs.
How is it that hugely profitable companies such as ExxonMobil and General Electric often get away with paying little to no federal taxes? It’s because they employ armies of lobbyists who sculpt the tax code to make sure they don’t. Now it comes time for “reform,” and what are those companies going to do? They’ll say, “Hey, reform sounds like a great idea. But let’s just make sure we don’t touch these loopholes.” Now multiply that by 1,000.
Then you’ve got the fact that Republicans just aren’t very good at this whole legislating thing, as we’ve become so aware. As effective as they were at building a wall of opposition to the Obama administration, they’re not nearly as good at doing affirmative things. While many of us thought that complete government control would produce an orgy of legislating, they haven’t managed to pass a single consequential bill in six months.
And they’re not getting the help they need from the White House. The president is a buffoon who can’t be bothered to learn either the substance of policy or enough about Congress to act as a positive force in the negotiations, and the White House staff is caught up in a gruesome civil war of endless leaks and backstabbing.
All that suggests that reform is likely to fail. But why might it succeed? Or, to think of it another way, why is it so different from health care?
The first reason it might succeed is that even if the public isn’t clamoring for tax cuts, neither will they be threatened as profoundly by the GOP effort on taxes as they were when it came to the ACA. A big tax cut may be bad policy, but ordinary people won’t feel that it’s going to do something as drastic as take away their health coverage or even kill them. Whatever activism that rises up in opposition to it is unlikely to have even a fraction of the intensity that the effort against ACA repeal did. Which means that members of Congress won’t feel as if their jobs are on the line if they vote for the eventual bill, even if it does favors only for the rich and corporations.
The second reason tax reform will be different is that, unlike on the ACA, Republicans will have some backup. That was one of the striking features of the health-care debate: Republicans were completely alone. Their bills were opposed by doctors, by hospitals, by insurers, by patient advocates, by pretty much everyone in the health-care world. That lack of allies made it much harder to make their case and persuade wavering members.
But that won’t happen with tax reform. In fact, there’s a mobilization underway to support the GOP effort. Let’s look at some reports from the last few days:
- “The Business Roundtable is embarking on a multi-million-dollar national TV and radio campaign, beginning in early August, to give tax reform extra momentum over the congressional recess.” (Politico)
- “The political empire affiliated with billionaire Charles Koch has spent $2 million to date to advance Trump’s tax-cut blueprint and will hold events this week in Washington to kick off the next phase of its multimillion-dollar campaign to drive congressional support for a comprehensive tax plan to slice corporate tax rates and enact broader tax cuts.” (USA Today)
- American Action Network “expects to spend as much as $20 million on a pro-tax reform effort dubbed the ‘Middle Class Growth Initiative,’ AAN told McClatchy. The program will promote tax cuts for ‘working families and small businesses,’ as well as a reformed tax code ‘that will be simpler, fairer and pro-growth,’ according to the organization.” (McClatchy)
So Republicans will be getting all kinds of outside help as they round up support for whatever they come up with, even if deciding on the particulars of their bill will be difficult.
But most important is this: Republicans really, really want to cut taxes for the wealthy and corporations. There is not a single policy goal that is more important to them. This is what they come to Washington for. If they do nothing else with their time in control of Congress and the White House, they will do this.
That doesn’t mean it’ll be easy. There will be conflicts among business interests about the details. But there’s another difference between tax reform and health care: When the going gets tough, there’s a fallback plan. Republicans can set aside that complex reform that overhauls the entire system, and just cut the corporate tax rate and some personal tax rates — bring down income taxes, maybe get rid of the inheritance tax, toss in a couple of other goodies for the wealthy, and they’re done. They’ve already dropped the idea of a border adjustment tax, because while some Republicans wanted it, it proved too divisive. Manufacturers might have liked it, but retailers were opposed, and arguing about it for the next year was a miserable prospect.
You could easily see the same thing happening to every controversial provision Republicans consider — it runs into some opposition from one interest group or another, and they say, “Okay, forget it.” The result is a stripped-down bill that still retains its heart: blessed relief for our suffering wealthy and corporations. For Republicans, that will be more than enough.