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Opinion As Democrats score a big BBB win, Republicans unleash the dumbest attack ever

House Speaker Nancy Pelosi (D-Calif.) speaks at the U.S. Capitol in Washington on Nov. 19. (Reuters/Al Drago) (Alexander Drago/Reuters)
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When the House passed the Build Back Better social policy bill on Friday morning, every Republican voted against a nearly $1.5 trillion tax hike on the rich and corporations.

Yet Republicans are planning to seize on this vote to proclaim Democrats are the party of plutocrats.

Yes, you read that correctly. House Democrats just passed the second half of President Biden’s agenda — the BBB social policy bill — with all House Republicans voting against it. And the package contains the largest high-end tax increase in more than a decade.

But somehow, Republicans are already telegraphing that they will focus on a single provision in the bill to argue that Democrats are the party that … cuts taxes for the rich.

While Republicans will launch all kinds of absurd attacks, this one is of particular interest: It captures something essential about the true ideological differences between the two parties and about the peculiar coalitional problems Democrats now face.

Republicans are seizing on the provision that lifts the cap on state and local tax deductions (SALT) to insist Democrats are delivering the rich a huge tax cut. The proposal would lift the cap on deductions from $10,000 to $80,000 through 2030.

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Top Republicans are declaring this shows Democrats are “out of touch,” are selling out “working families,” are “shoveling money to the rich” and are rewarding “liberal elites,” particularly in wealthy coastal enclaves.

Okay, then. Here is a partial list of what Republicans just voted against:

  • A surtax on incomes over $10 million
  • A corporate minimum tax that would prevent profitable corporations from gaming down their tax bills, sometimes to zero
  • A curb on multinational corporations avoiding huge amounts of taxes by shielding income through all manner of profit-shifting chicanery abroad
  • Beefed-up IRS enforcement to crack down on wealthy tax cheats

These provisions would raise taxes on the wealthy and corporations by a total of at least $1.4 trillion, according to the Joint Committee on Taxation. They would help correct for vast inequalities in our tax code and curb ways elites have long gamed it to enrich themselves.

Every House Republican voted against all of it. Given that Republicans also passed a 2017 tax cut that lavished enormous benefits on corporations and the rich, the idea that Republicans will highlight the SALT provision to cast Democrats as the party of plutocrats is beyond ludicrous.

“Republicans oppose a $1.4 trillion tax increase on corporations and high-income taxpayers,” Steven Rosenthal, a senior fellow at the Tax Policy Center, told me. “They justify this by highlighting the modest relief for state and local taxes paid by some high-income taxpayers, which is minor by comparison.”

“Making the Republican stance all the more ridiculous,” Rosenthal continued, Republicans in 2017 “cut taxes by nearly $2 trillion, largely for corporations and the rich.”

To be clear, it’s a problem that Democrats lifted the SALT cap, in numerous ways. First, it is a regressive tax cut that will indeed disproportionately benefit the very well-off.

But Democrats can fix this when the Senate takes up BBB. One idea pushed by progressive senators and think tanks is to make the deduction available only to incomes below $400,000.

Second, this does highlight a real coalitional problem Democrats face. The SALT cap hits households with higher incomes who pay large amounts in state and local taxes, and these tend to be in blue states with higher taxes and more public services.

So by lifting the cap, Democrats are appealing in part to wealthier suburbanites in coastal states who want to use already-high state taxes they pay to relieve their federal tax burden. That’s why this is necessary to get House moderates in places such as New York, New Jersey and California to support BBB.

So the Democratic reliance on those voters does risk pushing the Democratic agenda in a more regressive direction. And it’s why Republicans are attacking this as a giveaway to liberal and coastal elites.

But this also points to a deeper absurdity in the GOP attack, one that concerns the history here.

The SALT cap was originally included in the 2017 tax law by Republicans. They wanted to raise revenue to make their enormous tax cut for the rich and corporations look a little less fiscally unreasonable.

Chye-Ching Huang, a tax expert at New York University, points out that this really means Republicans essentially raised taxes on higher-income individuals in those states to offset a huge tax cut on even wealthier individuals.

“The 2017 tax law capping the SALT deduction was used to pay for tax cuts that were overall even more tilted to the wealthiest filers,” Huang told me.

In short, Republicans are comfortable attacking tax cuts for higher-end individuals, but only when it mainly targets blue state and coastal taxpayers, even though Republicans cut taxes on high-income individuals by far more. They’re posing as anti-elite by singling out this one provision, while voting against undoing the enormous tax cut for the rich that they themselves implemented.

Making this even more ridiculous, overall BBB raises taxes on the wealthy to fund investments in fighting climate change, curbing child poverty, expanding health care access on multiple fronts, and a whole host of other social supports.

And Republicans want to attack Democrats as plutocrats? No one should pretend there’s a shred of legitimacy to this nonsense.

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