House Republicans have soiled the Tax Cuts and Jobs Act with the Democrats’ favorite economic elixir: class warfare. And yet this has bought Republicans even more ferocious Democrat resistance.
“Instead of following through with the promise of taking seven brackets and simplifying them to three, Speaker Ryan and Chairman Brady added in a fourth bracket exclusively for millionaires,” complains David McIntosh, president of the pro-market Club for Growth. This complex “Bubble Tax,” as it’s been dubbed, imposes an effective marginal tax rate of 45.6 percent on single filers who earn more than $1 million and couples who make between $1.2 and $1.6 million. “That’s a real tax increase on successful people who invest and create jobs,” McIntosh lamented. Shamefully, this would be 15.15 percent above today’s 39.6 percent top rate.
The widely applauded 25 percent rate for small-business owners who file 1040s only benefits the first 30 percent of income. The balance would be taxed up to the proposed 45.6 percent rate. Warns McIntosh: “That means no tax cut at all for most small businesses and family-owned companies.”
And rather than kill the 40 percent top Death Tax immediately, Republicans placed it in a six-year induced coma. The Tax Policy Center predicts that some 5,500 grieving families will endure this double taxation annually, even while bewailing their departed. That’s 33,000 needlessly miserable families across this needless delay.
This Republican apostasy would be bad enough if it purchased Democrat votes or at least quiescence. But rather than applaud Republicans for internalizing the Left’s chief economic talking point, top Democrats now pound Republicans’ skulls with skillets, harder than ever.
• “This is a shell game, a Ponzi scheme that corporate America will perpetrate on the American people,” snapped House Democrat leader Nancy Pelosi of California. “But if you’re the wealthiest 1 percent, Republicans will give you the sun, the moon, and the stars — all of that at the expense of the great middle class.”
• “This bill is everything America doesn’t want,” snarled Senate Democrat leader Chuck Schumer of New York. “Like a fish, if it stays out in the sunlight too long, it stinks.”
• “Republicans claim their tax bill will spur economic growth, but all it really does is help people like Donald Trump, his cabinet, and wealthy Republican donors keep money in their pockets,” Rep. Maxine Waters (D – California) pummeled.
Notwithstanding Democrat catastrophism, this measure helps the middle class. According to the Tax Foundation, this bill:
• “Increases the standard deduction from $6,350 to $12,200 for singles, from $12,700 to $24,400 for married couples filing jointly, and from $9,350 to $18,300 for heads of household.”
• It “would lead to 3.9 percent higher GDP over the long term, 3.1 percent higher wages, and an additional 975,000 full-time equivalent jobs.”
• “When accounting for the increased GDP, after-tax incomes of all taxpayers would increase by 4.4 percent in the long run.”
Top-flight tax fighters are delighted that middle-class taxes would drop but are aghast that Republicans would boost levies on anyone.
“If you let the other side set the terms of debate, you lose,” publisher and flat-tax guru Steve Forbes tells me. “The Republicans have been letting the Left define the terms of debate on healthcare and taxes and losing badly on both. Incredibly, when it comes to cutting taxes, the GOP turns out to have the backbone of a cream puff. Pathetic!”
“The GOP should stick to growth,” says free-market economist and co-founder of the Committee to Unleash Prosperity Larry Kudlow. He also advises Republicans: “Stop letting Dems mau-mau them on rich people and redistribution. And hammer away that corporate-tax-rate reduction helps wage-earners the most.”
Lesson for Republicans: You never can out-Left the Left. The harder you try, the harder Democrats will bludgeon you with truncheons. So, just do the Right thing — always and forever. On taxes, that means cutting marginal rates for all Americans, regardless of income. Republicans should leave tax hikes to Schumer, Pelosi, and the Party of Confiscation.
Deroy Murdock is a Manhattan-based Fox News contributor and a contributing editor with National Review Online. He has been a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. Read more opinions from Deroy Murdock — Click Here Now.
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