John Hamilton, a Democrat, is the mayor of Bloomington, Ind.
As the mayor of a small, Midwestern city, I’m watching federal tax reform play out in the nosebleed seats, far from the debate about deductions, sunsets, trade deficits, health-care impacts and dollar effects. But I work every day for people who will be affected directly.
Much in the tax proposals distresses me and threatens my residents greatly, such as its shocking transfer of wealth away from salt-of-the-earth working families to corporations and very wealthy families. Not to mention its $1.4 trillion in new deficit spending over the next 10 years, which would mean borrowing nearly $5,000 for every woman, man and child in the United States.
To get a sense of scale, I imagine borrowing the same per person in my own community of 85,000 people: $400 million. That’s a big number. It would more than triple our local debt.
Maybe it’s for a good cause? We usually borrow money to build sewers or roads, new parks or buildings or trails — things that last and generate shared, long-term community wealth. For example, my city recently borrowed about $30 million to build a major park over an old railroad switchyard to serve our community for decades.
I imagine telling my community that I want to sell $400 million in bonds — to be paid off by everyone in town over the next generation — to give six-figure tax breaks to our wealthiest families and big tax cuts to local corporations. I’d be run out of town.
If I asked the city council to approve tripling our local debt to give hundreds of thousands of dollars per year to a few hundred of our most prosperous residents, they would ask me what I was smoking. Preposterous, they would say.
What is it about Washington? Why is it not obviously preposterous at a federal level to do the same thing?
Some may say: Well, hold on, cities (or states) do similar things by other names. But we do no such things. We occasionally offer specific tax abatements or incentives to particular companies or entities doing useful things — such as expand employment or create affordable housing. For example, this year we offered tax abatements to produce permanently affordable homes for 50 percent of a new housing development. But these actions are focused on and scaled to specific outcomes we want — particular new jobs or affordable homes or investments — and the benefits are clawed back if promises aren’t kept.
Perhaps local tax cuts similar to the federal proposals could win support from a city council if they were tied to performance: tax reductions for corporations if they actually delivered higher wages or increased domestic investments. Perhaps I could make a case for such massive borrowing if we were investing in quality day care or better health care for poor children so they could have more success in life, strengthening our whole community. Or maybe if we were investing in new energy sources or digital connections so our overall economy could thrive.
But I simply cannot imagine a city council in America passing — or any mayor proposing — a tax cut structured like the federal proposals: giving massive tax reductions to the wealthiest families and all local corporations, with no particular promise of anything in return.
I’m watching a bill being steamrolled through Congress with no hearings or public debate, whose provisions I believe would never survive a local city council discussion. For goodness’ sake, what is going on in Washington?
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