Showing posts with label tax plan. Show all posts
Showing posts with label tax plan. Show all posts

Sunday, December 24, 2017

Trump, Taxes, and the Triumph of Ideology: Why the tax plan may cost Republicans Congress and why it may be worth it to them

Emerging conventional wisdom among Democrats, pundits, and political scientists is that the Republican tax bill is a potential political disaster for the Republicans, threatening their control of Congress in 2018.  This wisdom may be correct but it may also be besides the point.  Conventional wisdom assumes the goal of the Republicans is to win re-election in 2018, but what if that is not true?  What if, instead, the vote was ideological not strategic, and that the longer term plan was simply to dismantle the welfare state?  If that is the case, then losing the battle for Congress to win the ideological war on government is worth it for Republicans.
It is beyond received wisdom that political scientists and pundits think that the most important value motivating members of Congress is reelection.  David Mayhew’s 1974 Congress: The Electoral Connection, best articulates this argument.  Congressional members are rational actors, motivated by re-election, and therefore will act in ways that maximize that goal.  Similarly in a representative democracy the assumption is that unpopular acts by Congress will be electorally punished and therefore congressional members will act in ways that serve constituent interests.  This is the logic of Richard Fenno’s Home Style and of former House Speaker Tip O’Neill’s quip that “all politics is local.”  Yet this claim assume that voters are rational and informed and that representatives are solely motivated by the electoral connection.  But what if all is not true, what if voters are not rational and informed and that ideology trumps the electoral connection, what then?
First, there is significant evidence that the tax bill was bad politics.  An NBC/Wall Street Journal polls suggests nearly two-thirds of Americans see the tax plan as benefiting the wealthy and corporations.  Various polls see about half the public disapproving of it.  Other polls point the public seeing Trump bad for the economy, or give him or Congress low approvals.  And in a generic congressional poll as reported by the Washington Post and New York Times, Democratic control of Congress is preferred over Republicans by a 56%-38% or an 18% lead. This lead is greater than in 2006 when Democrats took control of Congress or in 2010 when Republicans regained majorities. Such a lead in consistent with the makings of a wave election in 2018.
Republicans will counter that once people start getting their checks support for the tax plan will grow.  Yes the tax plan may grow more popular but the 1981 and 1986 Reagan tax plans did little for the GOP, as was the case with the Bush’s in 2001 (although 9/11 makes it hard to sort out its effect), and Obama got little credit for the Affordable Care Act or even the 2009 stimulus bill.  Tax cuts, no matter how bad or popular, have more measured impacts on voting behavior.  Republicans should not count on it as their 2016 electoral savior, nor should Democrats see it as their pathway to congressional majorities.
Politically there are also other reasons to question how damaging the tax cuts will be to Republicans.  With political geographic sorting, gerrymandering, and the high percentage of safe seats, chances of a major wave are less than in 2006 and 2010.  There is powerful political science evidence that indicates that the 2010 Census and redistricting has produced far more gerrymandered seats now than in previous decades, diminishing the chances of a significant number of flipped seats.  America is also far more polarized today that in 2006 and 2010, suggesting also that even if Trump’s base is hurt by the tax cuts, they might stick with him in 2018, even if the Democrats come up with a credible counter-narrative about what they would do if elected (they have yet to do that).  Finally,  it is simply wrong to extrapolate from generic congressional disapproval to the concept that voters dislike their member of Congress.  Political scientists call this the ecological fallacy.  We see a variation of that daily in that voters give Congress low approval ratings but love their member.
Let’s ignore the politics of the tax plan.  Concede for the sake of argument that it is a bad tax policy.  What then?  For it to have electoral significance requires voters to be informed about the plan and that they act rationally based on their pocketbooks.  But neither may be true.  Voters may be misinformed or vote ideologically, or Republicans might be able to frame the tax cuts in ways that convince their base and swings to support Republican candidates nonetheless.  This is the “What’s the matter with Kansas?” thesis.
But more powerfully, what if Republicans know the tax plan will hurt them in 2018, What then?  Much of the polarization and partisanship is over the most basic question in politics–Why government?  Here the dispute is over whether government should exist at all, with a secondary question being what should government do.  It is at these two levels that the political debate today is centered.  It is over whether the government or market should make basic decisions about who has health care or who is rich or poor.  It is a debate about the merits of the welfare state and whether  it is the job of the government to intervene beyond the most basic aspects of market fundamentalism  or Social Darwinism. 
Today’s polarization is far different than political disagreement ten, twenty, or thirty years ago when the basic premises of why government or the welfare state were not questioned.  Debates then were about lower-ordered questions regarding the best way to make government work to eliminate poverty or homelessness.  This is where Democrats still want to debate, but this is not the case for the Steve Bannon’s of the world, Donald Trump, and perhaps many Republicans.  They are  questioning the very purpose of the state, and for whose benefit it should serve.
Was it the tax vote worth it?  Maybe yes.  Even if they lose majorities the Democrats will have limited ability to reverse much of what was done.  Trump or Pence will still be president and simple reversal of the Trump-GOP tax plan and other policies are not enough.  Lacking a grand plan or narrative, what just happened will have larger, longer-term structural impact on the United States and the world.  If in fact that is the case, the vote was worth it.  This suggests then that when it comes to ideology, Mayhew may have it wrong.  More importantly, Mayhew and the electoral connection thesis may be dated.  It was perhaps a product of an era of consensus in the 1970s that no longer exists, suggesting that perhaps it is the ideological connection that drives much of contemporary politics, thereby rendering it besides the point whether the tax bill costs Republicans their majorities.

Monday, December 4, 2017

The Expendables: Donald Trump versus the US Congress

Donald Trump is increasingly expendable to the Republicans in Congress.  Assuming the tax plan is
signed into law, Trump will be increasingly expendable and a liability to Congress as they head into the 2018 midterm elections and beyond.  Simply put: With the passage of the tax and the increased problems the Mueller investigation will pose to Trump and the Republicans, the latter will have less and less need for the former while finding him more and more an electoral problem.

Few if any see the connection between the tax overhaul and the fate of Donald Trump with the GOP Congress.  Yet if there is anything the Republican Congress wanted more than anything else was the tax cuts and overhaul.  Since Reagan the issue that has defined the party has been tax cuts.  It is the answer to everything.  If the economy is doing badly cut taxes. If the economy is doing well and the government is taking in too much money, cut taxes.  If we need to produce more jobs, cut taxes.  If there is tax cheating by businesses hoarding money in off-shore accounts, cut taxes.  Cutting taxes is like the classic cure-all nostrums sold by traveling salesmen in the 19th century.  One  bottle will cure anything that ails you.

Preaching tax cuts for all social ills is what the Elmer Gantrys of the GOP have preached for years.
Yes a few Republicans talked once of fiscal restraint and worried about deficits.  Yet those old Concord Coalition folks are gone.  So many seem shocked–shocked as Captain Renault was in Casablanca–that the likes of Susan Collins and John McCain would support this tax cut bill even though its regressive nature and impact will be to hurt the very people Trump and Republicans say they want to help.  Neither Collins not McCain were progressives; they are Republicans defined by  tax cuts über alles.  With this tax plan the Republicans get so much of what they have wanted for the last quarter century.

Depending on the version that finally passes, the Obama health mandate is gone, the estate tax is effectively gone, corporations pay less taxes and the rich pay less taxes.  In addition, the doubling of the standard deduction will help some but hurt non-profits, the poor will not be able to take advantage of the child care tax credit, the loss of medical deductions will do more to push many into debt, and the loss of the deductions for state and local taxes will penalize Democratic high tax and social welfare states such as Minnesota.  One should not infer that the GOP plan is intentionally cruel but its regressive nature to help the rich will have this impact.  Further, since there was concern that the tax cuts will not live up to the mythical trickle down magic, there are requirements to make further cuts to balance the budget in the future–this will pressure cuts in Social Security, Medicare, and Medicaid.  All of this is reminiscent of what David Stockman talked about in terms of the logic of the Reagan tax cuts back in the 80s–blown up the budget with large deficits into to pressure cuts to the welfare state.

Assuming the GOP gets all of this, they have gotten most of their agenda and what they want from Trump.  Of course this is a big if.  The outcome of an Alabama Senate election, the fate of Al Franken, and the ability of the House and Senate to reach agreement with one another and Trump  might still wreck all this.  But assume not...what value is there in keeping Trump around?  His agenda is largely over with the tax plan.  There will be no wall, there will be no major infrastructure  package, and abandoning NAFTA and the other trade agreements are either superfluous, icing on the cake, or something the Republicans do not really care about.  For most Republicans, the Trump presidency largely ends with his signature on the tax plan.

It will not be too much to assume that with Michael Flynn cooperating with Mueller, Jared  Kushner, Donald Trump, Jr., or Jeff Sessions might not be next.  How they too might implicate the president if at all is only a question of time.  But if polls suggest that Trump is already a problem for the GOP into 2018, he will become more so next year as more indictments and trials mount.  One can also speculate on whether the swirling sexual harassment controversies will finally ensnare the president next year.  If all that happens, the Congressional Republicans might be better off without him than with.

No this does not mean he will be impeached by Republicans.  This is still a Democratic Party fantasy.  Nor should the Democrats count on an unpopular president guaranteeing their path back to power.  Yet if Trump has already succeeded in getting the congressional Republicans most of what they want, the president will become expendable to them in 2018 and beyond.