How The Tax Cut Scam Works

Here is exactly how the Republican tax scam works, as explained clearly by one of its proponents.

From a Politico story about the current Republican tax cut proposals:

But Ryan Ellis, a conservative tax consultant, says most people don’t care how much the rich receive in tax cuts so long as they get what they consider to be meaningful reductions as well.

“Ask a family making $87,000 with two kids if they could use an extra $1,200,” he said.

“The Jones family doesn’t give a s—- if distribution tables that JCT or Treasury or TPC put out are skewed at some end because of the pass-through rate — they don’t know or care about any of that,” said Ellis. “To them, it’s a new refrigerator, it’s a vacation they couldn’t take.

“That’s the way they look at it, that’s the way Republicans look at it, and that’s how we sell tax relief to the middle class.”

Indeed. The Republican Party’s proposal to the vast majority of Americans is this: “We will cut your taxes by a small amount of money.” Left unsaid is this: “We will cut the taxes of very rich people by a very large amount of money—hundreds or thousands of times the amount of money that you will get. We will also cut back on funding the government programs that benefit you in order to return large amounts of money to the rich. When you add up all the net impacts, you, the regular person, will lose. But we’ll wave this relatively small tax cut in your face and tell you you’re getting money back in hopes that you ignore everything happening behind the curtain.”

The entire angle of this Politico story (“No tax cut for the wealthy? Easier said than done”), that it is nearly impossible to pass a tax cut that does not give money back to the rich for the simple reason that the rich pay the majority of taxes, is absurd. You can avoid this conundrum with a single sentence: “Notwithstanding any other rules, no taxpayer with an income of [X] shall pay a tax rate lower than [Y].” It’s a simple minimum tax, to ensure that the rich do not escape paying what we want them to pay. This is not a revolutionary idea. The United States already has its own minimum tax—one that has cost Donald Trump money in the past, and which the Republican Party now proposes to eliminate entirely.

Even pretending that middle and lower class voters should pursue “tax cuts” is a dishonest framing. Middle and lower class voters should pursue redistribution. Anyone who thinks, “We all get some money back, and of course the super rich get back more, because they’re already paying more taxes” has already been led astray. The proper way to think about it is, “How can the government remedy gross economic inequality by moving wealth from those who have too much to those who have too little?” In this framework, you don’t worry about tax cuts; you worry about the movement of wealth down the economic ladder, from rich to poor. This results in greater equality and, ultimately, a fairer and more balanced society.