Wednesday afternoon, seated in a carwash waiting room, I watched Republicans abasing themselves right there on network television in a scene best summed up as Fifty Shades of Orange. They were faking the 2017 version of Rush Limbaugh’s evocative “Gorbasm,” with you-know-who in the roll of Gorbachev.
The reactions to the Republican Tax Bill seemed odd to me even before then. The Republicans seemed to be overselling the benefits, but the Democrats seemed even more to be overselling how the fallout was going to make the GOP toxic in 2018.
It won’t. Peggy Noonan explains:
[T]he bill is going to prove popular. The Democrats bet wrong on this. Almost immediately on passage, Wells Fargo and Fifth Third Bancorp announced a raise in their lowest wage to $15 an hour. AT&T said it would give about 200,000 unionized workers a $1,000 bonus and increase capital spending $1 billion. Comcast said it would give 100,000 employees bonuses and spend more than $50 billion in infrastructure improvement.
You can sit back in your sophisticated way and say, “Hmm, that looks like a curiously orchestrated public relations push.” You can say, “How nice, the malefactors of great wealth are giving their workers a little tip.” You can wonder if they’re spreading cheap good cheer to grease their mergers. But if you are working the line in Smalltown, U.S.A., and just got bumped up to $15, or you’ve been surprised by an unexpected thousand dollars at Christmastime, you will see this not as a tip but as a real and concrete break, thanks to that most unexpected of benefactors, the U.S. government.
Who cares about CEOs’ motives if they’re doing something good?
It is true the tax bill is not popular in the polls. A recent Wall Street Journal/NBC survey put support at 24% with 41% opposing it. But here’s something I’ve been meaning to mention for a while: During the Reagan era, I noticed a funny thing about public opinion and tax policy. When you run for office and promise you’ll cut taxes, the crowd cheers lustily. Then once in office you put together a tax bill and the polls show public support is lukewarm. Then you pass it and its popularity bubbles around in the polls. Then an election comes and you win and the voters tell pollsters they backed you because you cut taxes. There are a lot of reasons this might be—a campaign vow is intentional and abstract, a final bill is real and messy—but I suspect there’s something in this: Voters don’t like to tell pollsters they’re for tax cuts. They have the feeling it’s the wrong position, that it’s small-minded and if they were nicer, they’d be less self-interested.
Anyway, polling doesn’t matter right now. Down the road it matters.
(Peggy Noonan, paywalled as usual)
If the Republicans are toxic in 2018, as they may well be, it won’t be because they cut taxes for most taxpayers. Not even if taxpayers in higher brackets get cuts that put proportionately more dollars back in their pockets. Yes, Virginia, even an across-the-board cut of, say, 10% on rates benefits higher-bracket taxpayers more than lower-bracket taxpayers; a 10% cut on a 20% marginal rate is 2%, but it’s 3% on a 30% marginal rate. This is not rocket science nor does it seem sinister to me.
I’m not an enthusiastic supporter of the Bill, which almost certainly is not a major simplification, but I agree with Noonan that the Democrats are whistling in the dark.
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