The Republican Tax Plan Could be a Gift to Democrats

Photo by 401(K) 2012

With the Republican tax plan set to be possibly up for a vote on Friday and its future still entirely up in the air, it’s easy to get caught up in the partisan fight and forget one fundamental aspect of the situation: in the long run, this tax plan could be a gift to Democrats, electorally, sure, but especially policy-wise.

Electorally the benefits to Democrats seem relatively straightforward: a deeply unpopular bill under a deeply unpopular President, proposed by an even more unpopular Congress makes for an easy political win for the opposition party. For the GOP the political upside of the bill is limited to the larger disaster that would be a failure to pass yet another piece of legislation. With the Democratic party able to present a unified front in opposition to the tax plan, politically it’s a win-win situation: if the bill passes it makes for an easy list of hated policies to run against, if it doesn’t then progressive policies remain in place and the GOP once again looks ineffective.

The policy benefit to a progressive agenda is less evident and more controversial. After all this bill hits blue states hard with the repeal of the State and Local Tax Deduction, lowers taxes for the wealthy while possibly even raising taxes on the poor and lower middle class, taxes graduate students out of school, cripples the Affordable Care Act and obstructs adoptions, all for the purpose of lowering the corporate tax rate to a figure nobody has seriously asked for. By all accounts this bill spells disaster to a progressive agenda, but it hides what may be a bright future for Democratic policies under all the filth.

For one thing, we may finally find out if the individual mandate actually works. The idea behind the individual mandate is simple: if you can afford insurance, you must have insurance or pay a fine. This is supposed to guarantee that young and healthy people enter the insurance pool, thus subsidizing healthcare for those who need it; it essentially is supposed to create a buffer to allow insurance companies to cover preexisting conditions like diabetes, or being pregnant, without going bankrupt themselves. The problem with the mandate is that, for many people, the fine is actually lower that the cost of an insurance plan, while for others it is simply ineffective to essentially blackmail them into getting covered. A repeal of the individual mandate, which despite its many flaws its absence would still likely spell disaster for the healthcare market, would allow a future Democratic administration to attempt a more effective incentive to prop up the Affordable Care Act without risking anything by changing it, that risk having been generously taken on by the Republicans, or even rally public support around the idea of a more progressive plan, such as a public option or Medicare for all.

Next comes funding for progressive policies. An issue most Democrats often fail to address is the ability to fund their proposed policies: Medicare for all, affordable college and free pre-k are all incredibly expensive proposals that can’t be funded simply by some vague reference to the losing political battle of “making the rich pay their fair share”. At some point Democrats would have to find another big source of federal tax revenue, and what better place to start than the State and Local Tax Deduction, a piece of the tax code that has been untouchable for decades despite 90% of the benefits flowing only to those with incomes over $100,000. Repealing the SALT Deduction could allow taxes to be raised on the wealthy and revenue to be gathered for federal programs all by the hand of the GOP; all Democrats would have to do is not reinstate it, while receiving none of the usual backlash for “redistribution of wealth”.

While not reinstating the SALT Deduction would be easy, what would be even easier would be rolling back other provisions in the current tax bill: the Adoption Tax Credit, an increase in the Child Tax Credit and other popular programs could be once again instituted to strong popular support. Democrats would even be able to raise the corporate tax rate from the 20% proposed in this bill to 28% and still look fiscally responsible, as it would be a drop from the current 35% and the number many had hoped to reach in the first place.

There are so many ways the GOP tax bill could work in Democrat’s favor, but this isn’t how politics should work; hoping the other side drops the ball so you can bask in the glow of picking up the pieces is a recipe for disaster and a betrayal to the very foundations of democracy. Democrats should fight this bill tooth and nail because they sincerely believe that the policies in it would be disastrous for the American people, irrespectively of what a hypothetical, idealized, fictional future Democratic administration would be able to build from the rubble. As a Democrat I may see no downside to this bill, but as an American I see no upside either.

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