TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, December 17, 2017

The GOP Tax Bill May Be The Worst Piece Of Legislation In History

Washington Post op-ed:  The GOP Tax Bill May Be the Worst Piece of Legislation in Modern History, by Fareed Zakaria:

If the Republican tax plan passes Congress, it will mark a watershed for the United States. The medium- and long-term effects of the plan will be a massive drop in public investment, which will come on the heels of decades of declining spending (as a percentage of gross domestic product) on infrastructure, scientific research, skills training and core government agencies. The United States can’t coast on past investments forever, and with this legislation, we are ushering in a bleak future.

The tax bill is expected to add at least $1 trillion to the national debt over the next 10 years, and some experts think the real loss to federal revenue will be much higher. If Congress doesn’t slash spending, automatic cuts will kick in unless Democrats and Republicans can agree to waive them. Either way, the prospects for discretionary spending look dire, with potential cuts to spending on roads and airports, training and apprenticeship programs, health-care research and public-health initiatives, among hundreds of other programs. And these cuts would happen on top of an already difficult situation. As Gary Burtless of the Brookings Institution points out, combined public investment by federal, state and local governments is at its lowest point in six decades, relative to GDP.

The United States is at a breaking point. In August, the World Bank looked at 50 countries and found that the United States will have the largest unmet infrastructure needs over the next two decades. Look in any direction. According to the American Road & Transportation Builders Association, the United States has almost 56,000 bridges with structural problems (about 1,900 of which are on interstate highways), and these are crossed 185 million times a day. ...

There are genuine problems beyond underfunding. The costs of building American infrastructure are astronomical. But during the Depression, World War II and much of the Cold War, a sense of crisis and competition focused America’s attention and created a bipartisan urgency to get things done. Ironically, at a time when competition is far more fierce, when other countries have surpassed the United States in many of these areas, America has fallen into extreme partisanship and embraced a know-nothing libertarianism that is starving the country of the essential investments it needs for growth. Those who vote for this tax bill — possibly the worst piece of major legislation in a generation — will live in infamy, as the country slowly breaks down.

http://taxprof.typepad.com/taxprof_blog/2017/12/the-gop-tax-bill-may-be-the-worst-piece-of-legislation-in-history.html

| Permalink

Comments

One wonders if the and the NYT were equally upset when the Obama administration and a Democratic Congress refused to spend huge sums of economic stimulus money on infrastructure. Why? Because most of that would go to strong, burly men—and instead used it to subsidize local government jobs. Then infrastructure did not matter. Nothing has changed.

And does the article mention the real reason many in our chattering classes hate this tax bill? It strips away tax deductions that benefit wealthy people in high-income states such as NY and California.

It does appear that the Republican party is finally doing what some have told it to do for many years, which is to quit catering those who'll never vote for them anyway. In short, give those who claim to want progressive taxation taxes that are progressive.

Posted by: Michael W. Perry | Dec 17, 2017 11:59:35 AM

I cannot speak for the "many in our chattering classes." The reason I view this as a poor piece of tax design is that (1) it creates multiple distinctions based on form, which invites massive tax gaming, (2) it provides most of its benefits to corporations and the already very wealthy. The first problem is beneficial to me: I teach aspiring tax lawyers, who will have lots more to do under the new law. The second does not affect me much personally one way or the other; although I have not run my own circumstances through the new rules, I don't see a lot that will make much difference to me personally. I do, however, find the notion of cutting taxes for the rich on the back of the poor repugnant as a matter of moral philosophy.

Posted by: Theodore Seto | Dec 17, 2017 9:04:41 PM

Really wish there was a like button for comments -- "Like"

Posted by: Dale Spradling | Dec 17, 2017 9:28:37 PM

"Give those who claim to want progressive taxation taxes that are progressive."

Exactly. If it were constitutional, I'd be in favor of a hefty federal excise tax on everyone who's a registered member of the Democrat or Green parties.

Posted by: MM | Dec 18, 2017 7:47:06 AM

Paul, in lieu of posting Michael W. Perry's fulminations, why not just link directly on a regular basis to Breitbart, or some comparable source of delusional right-wing complaining?

Posted by: Brian | Dec 18, 2017 7:49:51 AM

Brian: I don't believe you addressed Mr. Perry's main point, so address mine:

The federal government already leans exclusively on the top 20% of households for all net federal tax revenue. You know, those rich folks who don't pay their fair share, or so I've often heard.

Why shouldn't those same households in blue states bear more of the federal tax burden? After all, they vote blue like everyone else in California, New York, etc. Why shouldn't the tax code force them to put their money where their mouth is?

I'm not interested in ad hominems, just stick to the question please.

Posted by: MM | Dec 20, 2017 11:03:23 AM

@ MM:

Feel free to educate yourself: https://en.wikipedia.org/wiki/Federal_tax_revenue_by_state.

Posted by: Honest Abel | Dec 22, 2017 11:08:44 AM

Honest Abel,

I'm quite educated already on who pays how much.

So my question remains.

Posted by: MM | Dec 24, 2017 9:37:36 AM