Post-Trump Republicans Are All About Lower Taxes

As is their custom, Republicans changed the name of the House Education and Labor Committee last week. It is now called the Committee on Education and the Workforce, as it was from 2011 to 2019, when the party last controlled the House.

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Words cannot convey how little this matters in a practical sense. But the symbolism, intended and otherwise, is interesting: When it comes to politics, Republicans like to talk about culture-war stuff. When it comes to governing, they tend to prioritize regressive economic policy.

The newly renamed committee’s website explains why the change was made:

“Labor” is an antiquated term that excludes individuals who contribute to the American workforce but aren’t classified as conventional employees. “Labor” also carries a negative connotation that ignores the dignity of work; the term is something out of a Marxist textbook that fails to capture the accomplishments of the full spectrum of the American workforce.

One thing to note here is that this account is historically illiterate. The very first Republican Party presidential campaign was waged on the slogan “Free Soil, Free Labor, Free Speech, Free Men, and Fremont,” neatly tying together the nascent party’s ideology with the name of John C. Fremont, its standard-bearer. In 1861, Abraham Lincoln argued: “Capital is only the fruit of labor, and could never have existed if labor had not first existed.” Twelve decades later, in a speech to the AFL-CIO, Ronald Reagan said: “America depends on the work of labor, and the economy we build should reward and encourage that labor as our hope for the future.”

The notion that only Marxists care about labor is closer to Marxist propaganda than anything else. But (note new title) Education and the Workforce Chair Virginia Foxx and her colleagues in the House GOP are trying to send voters a message about the direction of the post-Trump Republican Party.

As the party has come to rely more on less-educated and more culturally conservative voters, some have argued, it should care more about working-class economic interests. Oren Cass, a former advisor to Mitt Romney and Marco Rubio, has made the case for “a conservative labor movement” and tried to interest Republicans in the idea of legislative changes that could both revitalize private-sector unions while also changing how they operate to address certain conservative criticisms.

More broadly, the party has moved away from its prior emphasis on spending cuts and “job creators.” Now it tends to favor a cultural politics that positions Republicans as defenders of women’s sports rather than apostles of hard-right economics. This populist turn was always paper-thin — it’s not a coincidence that the main legislative achievement of Donald Trump’s presidency was a corporate tax cut — but after the 2018 midterms, Republicans really did focus on cultural issues more than economic ones.

The workforce-vs.-labor dispute is just the most visible sign that the new post-Trump party is an awful lot like the old pre-Trump party. House Republicans’ first piece of policy legislation was a proposal to cut IRS funding in order to make it harder to catch business owners who cheat on their taxes. Because the bill would result in reduced compliance, the Congressional Budget Office says that it would increase the deficit by about $111 billion over 10 years. At the same time they are increasing the deficit by defunding the tax police, Republicans are laying the groundwork for a fight over the debt ceiling in which they will (in one form or another) demand an all-cuts approach.

But there is an even more breathtaking example of the conservative movement’s priorities. As a condition for agreeing to Kevin McCarthy’s accession to the speakership, House rightists secured a commitment for a floor vote on a ludicrous proposal they call the Fair Tax Act.

The legislation would replace the current income tax, payroll tax and estate tax with a 30% national sales tax. Except to make it sound better, Fair Tax proponents call it a 23% tax. Their logic is that if something sells for $100 plus $30 in tax, then it’s a 23% tax — because $30 is 23% of $130.

That’s not how calculations of tax rates work. The reason for this dodgy math is that they are trying to obscure the reality that this plan would make most people worse off. According to the Tax Policy Center, in 2018 the middle quintile of the income distribution paid 8.9% of federal taxes while earning 15.2% of national income. Switching that to a flat consumption-based rate would be a tax increase on those middle-income households and an even larger one on the bottom 40%. Offsetting those higher taxes on the majority would be a windfall for the highest-income Americans, especially the tiny minority who stand to inherit multimillion-dollar fortunes.

Shifting to a consumption-based system of taxation has significant theoretical support in the economics literature. And it is entirely possible to create a consumption tax with a progressive structure. But Fair Tax proponents don’t want to — to them, the inegalitarian implications of their proposal are a feature, not a bug.

Of course there is no chance of the Fair Tax Act becoming law. But these kind of messaging votes are important statements of values and priorities. As in the tilt against the word “labor,” an influential strand of the American right sees any concern for economic fairness as illegitimate.

Republicans are interested in cultural populism as a means to the end of winning elections. But nothing has really changed about their habit of dividing the country into “makers” versus “takers” — and siding decisively with the owners of capital.