Much attention in Washington has turned to the question of reform of the Internal Revenue Code. Republicans on Capitol Hill are working from a nine-page framework that the Trump administration released in late September.
This means in turn that attention is turning (back) to Senator John McCain (R- AZ) who may yet play as pivotal a role in the upcoming debate on tax reform as he notoriously played this summer in the efforts to repeal and replace Obamacare.
As it happens, McCain is unpredictable on the subject of taxes. In 2001 he opposed a tax cut bill put forward by President George W. Bush. McCain was one of only two Republicans in the Senate to do so. His statement at the time was: “I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us, at the expense of the middle-class Americans who most need tax relief.”
But at other times, McCain has voted in favor of tax cuts that were subject to much the same objection, saying that they would pay for themselves by incentivizing investment.
This year, Tory Newmyer, of the Washington Post, has interviewed one of the men who best knows McCain’s mind on fiscal issues, Doug Holtz-Eakin, who advised on these subjects during McCain’s presidential campaign in 2008.Holtz-Eakin says whatever tax package is proposed, McCain will want to know whether it helps the middle class, and he’ll want to avoid adding “big red ink” to the government’s income statement.
The administration has worked rather hard to pitch its plan as one that won’t unduly favor the wealthy, with the President saying, “My plan is for the working people. I don’t benefit.” The administration is also trying to pitch it as a plan that won’t blow up the deficit. In other words, it is presenting this plan as if McCain and others of analogous centrist views should find it unobjectionable. Whether he or they will or not is of course another question.
Left Wing View
What does this situation look like from the left of the political center line?
The obvious line of response is, “show us your own tax returns, Mr. President.” After all, he has now made it a credential of this plan that he personally won’t benefit. How do we know that?
Absent POTUS’ tax returns, the WaPo’s Wonkblog worked from facts that are known, and the estate tax part of the overall tax plan proposal, to make two relevant observations. First, the proposed repeal of the estate tax “would add to the advantages that the children of the very rich enjoy from birth over other Americans,” and, second, the heirs of members of Trump’s cabinet in particular stand to benefit to the tune of $1.5 billion.
Matthew Yglesias, writing in Vox, has argued that the Republican Party will never be able to agree on a comprehensive package because it is attempting to comply with three mutually incompatible goals: first, make life easier for wealthy investors, the “job creators”; second, “deliver meaningful tax cuts to the middle class” third, “avoid increasing the budget deficit – or at least keep the deficit increase limited to something they can plausibly wave away with dynamic scoring.”
On twitter, Yglesias has attempted humor at the expense of the above mentioned estate tax repeal, asking, “How many lives will be lost due to estate tax repeal removing the disincentive to die.” Or, at least, I think that was an attempt at humor. The prospective death rate of the human population is 100%, after all, whatever the tax rates.
Right Wing View
On October 13, The Hill ran a story about how one important conservative in the House of Representatives, Mark Meadows (R – NC) is “courting” centrist Democrats to get them to assist in tax reform. If this is true, it may well support Yglesias’ theory about the impossible triangle: Republicans cannot hold together on any particular plan, so some faction within the party will have to find allies in the opposition party.
Linda McMahon, the administrator of the SBA, and a conservative figure best known for her years as CEO of World Wrestling Entertainment (WWE), tweeted that “small businesses are demanding tax reform.”
That comment set off a fascinatingly contentious thread. A twitter denizen called AngB said, “Obama crushed mid class” and there would be “no more hires” (by small businesses, presumably) until taxes came down. Mike Miller almost immediately replied, “Obama did not crush the middle class. Please give examples.” Ang doesn’t seem to have answered, by Lisa (@BostonHeel) did, saying that President Obama “raised taxes over and over on the middle class and small business owners.”