Krugman: The next generation of Republican class warfare

Krugman: The next generation of Republican class warfare

November 15th, 2017 by Paul Krugman/New York Times News Service in Opinion Times Commentary

Senate Majority Leader Mitch McConnell, R-Ky., flanked by Sen. Roy Blunt, R-Mo., left, and Majority Whip John Cornyn, R-Texas, speaks to reporters following a closed-door strategy session that included Vice President Mike Pence, on Capitol Hill in Washington, Tuesday, Nov. 7, 2017. (AP Photo/J. Scott Applewhite)

Photo by Associated Press /Times Free Press.

The other day, Mitch McConnell, the Senate majority leader, admitted to The New York Times that he "misspoke" when he declared that his party's tax plan wouldn't raise taxes on any middle-class families. But he misspoke when he said "misspoke": The proper term is "lied."

McConnell was forced into his sort-of-kind-of admission by a new report from the Joint Committee on Taxation, Congress's own scorekeeper, which found millions of middle-class families would see higher taxes under the Senate Republican proposal. But this wasn't some kind of narrow, technical mistake on his part.

Both the Senate proposal and the similar proposal from House Republicans offer huge tax cuts to corporations and the wealthy, then try to limit the impacts of these tax cuts on the budget deficit by clawing back tax credits and exemptions that mainly benefit the middle class. Of course many in the middle class would see their taxes go up.

But focusing on how many would face tax increases gets at only a small part of what's going on here.

Top-down class warfare, coupled with false claims to be cutting taxes on the middle class, has been standard GOP operating procedure for a long time. In fact, the current tax debate inspires an overwhelming sense of déjà vu, because many of the tricks Republicans are using come right out of the Bush administration's playbook in 2001 and 2003.

Tax breaks that phase in or out to make the 10-year budget impact look smaller? Check. Misleading examples and calculations to give the false impression of a tax cut for the middle class? Check. Pretending that cuts come free, that they won't eventually have to be offset by cuts to popular programs? Check, again.

But there are also some new aspects to this latest money grab. This time around, much more clearly than before, the goal seems to be to favor wealth, especially inherited wealth, over work. And buried in the legislation are multiple measures that would make it much harder for the children of the middle and working classes to work their way up.

So, about the wealthy: The prime example is the way GOP plans would eliminate or sharply reduce taxes on inherited wealth, which currently apply only to a tiny number of huge estates. Yes, Republicans are still pretending this is about helping small family businesses and family farms, but at this point that's a sick joke: The best estimates suggest only around 80 — eight-zero — of such businesses and farms pay any estate tax each year. This is about making wealthy heirs even wealthier.

Now let me shift focus instead to what Republicans are trying to do to ordinary families.

We're still waiting for detailed analysis of the Senate bill, but the House bill doesn't just raise taxes on many middle-class families: It selectively raises taxes on families with children. In fact, half — half! — of families with children will see a tax hike once the bill is fully phased in.

Suppose a child from a working-class family decides, despite limited financial resources, to attend college, probably taking out a loan to help pay tuition. Well, guess what: Under the House bill, that interest would no longer be deductible, substantially raising the cost of college.

What if you're working your way through school and your employer contributes toward your education expenses? The House bill would make that contribution taxable income.

What if your parent is a university employee, and you get reduced tuition as a result? That tuition break becomes taxable income. So would tuition breaks for graduate students who work as teaching or research assistants.

This isn't just ordinary class warfare; it's class warfare aimed at perpetuating inequality into the next generation. Taken together, the elements of both the House and the Senate bills amount to a more or less systematic attempt to lavish benefits on the children of the ultra-wealthy while making it harder for less fortunate young people to achieve upward social mobility.

Or to put it differently, the tax legislation Republicans are trying to ram through Congress with indecent haste, without hearings or time for any kind of serious study, looks an awful lot like an attempt not simply to reinforce plutocracy, but to entrench a hereditary plutocracy.

The New York Times

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