Democrats Are Attacking The Republican Tax Plan For The Wrong Reasons And In The Wrong Way

Pedro Nicolaci da Costa explains why Democrats et alia should oppose the Republican tax plan (boldface mine):

There are a few lines you can take to argue against tax cuts, including the idea that they benefit mostly huge companies and rich Americans.

Here’s the wrong one: In the weeks leading up to Thursday’s reveal of the Republican tax plan, Democrats have been harping on about higher budget deficits and a resulting “entitlement crisis” as a key justification for opposing President Donald Trump’s tax plan….

For the Democrats to take this line against the tax cuts is a mistake for three reasons. First, it’s hard for voters to understand, even when it’s dumbed down into the old trope of “you wouldn’t run your household like this.”

Second, it’s bad economics. Unlike households, governments can run big deficits, and they should be doing so especially when inflation is as low as it is today. Doing so can help spur economic growth, and the Democrats know this because it was a key lesson of the post-financial-crisis recovery.

Economists can and should argue over the best uses of that deficit — spending that boosts the economy versus tax cuts that line the pockets of the rich — but that’s a tangential argument for those not currently in power.

Third, there are much better objections about the harm this tax plan could cause — such as leading to greater inequality and more struggles for the middle class — or the false promises (such as that it will lead to higher wages) it’s being pitched with.

“The deficit is an abstraction that is pretty much meaningless to anyone other than an economist or budget wonk,” says Dean Baker, an economist who is the codirector of the liberal Center for Economic and Policy Research in Washington…

“Are the proposed tax cuts a huge giveaway to the rich? Most definitely,” wrote Kelton, a professor of public policy and economics at Stony Brook University. “Will they, as advertised, create a booming economy with benefits that trickle down to everyone else? I don’t think so. Trump’s plan will widen the country’s already dangerous wealth and income gaps, and because the gains go mostly to those at the very top, the tax cuts won’t do much to promote broad-based consumer spending or overall job growth….”

“But it would be unwise to oppose tax cuts, or any other federal legislation, simply because they add to the deficit,” she warns.

Kelton and other economists of wide-ranging political stripes argue that the biggest mistake politicians make is comparing government spending and budgets to those of households. The analogy appears sound, but it’s really apples and oranges. Unlike families, who may lack sufficient funds to pay their bills, governments that control their own currencies can always print money to meet their obligations.

Therefore a default is technically impossible. The only risk is inflation, if excessive bond issuance leads to rising prices. But the US economy has been suffering chronically from the opposite problem — and inflation rate that has consistently fallen short of the Federal Reserve’s 2% target for five years, pointing to an economy that is still operating below potential and reflecting stagnant wage growth for much of the population.

da Costa is right on the merits (and he also presents good arguments against the canard that Social Security is DOOOOOMED!). But even these arguments are too abstract. Democrats should ask people, “Do you want important things cut or your taxes to rise, so Donald Jr. and Eric–two guys on third who think they hit triples–can pay lower taxes?” Nobody likes those assholes, and attaching their mugs to this Republican tax plan is a great way to personalize the issue. Democrats should also state that Democrats will oppose a plan unless we know what effect it would have on Il Trumpe’s taxes (by the way, now would be an excellent time for him to release his tax returns).

If we remind enough people who benefits from this and who pays (and there are data suggesting this really bothers people), we can stop this thing–or at least make Republicans pay the price in 2018.

Because I can’t imagine anyone would favor the Donald and Eric Jr. Tax Relief Act. But for Intelligent Designer’s sake, don’t make bloodless arguments about the deficit. For once, go for the lizard brain.

Related: Bruce Bartlett writes:

To get back on offense, I think Democrats should stop trying to compete with Republicans on more distributionally fair tax cuts. When you can’t win, don’t play the game. Instead, they should say, if Republicans are willing to increase the deficit by $1.5 trillion, let’s use that money for something the country really needs that will create a vastly greater number of jobs. That is a giant infrastructure program.

Unfortunately, military Lernersim is the only acceptable form of Lernerism.

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