Post-Trump Republicans Are All About Lower Taxes

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As is their custom, Republicans changed the name of the House Education and Labor Committee last week. It is now called the Education and Workforce Committee, as it was from 2011 to 2019, when the party last controlled the House.

Words cannot express how little this matters in a practical sense. But the symbolism, intended and otherwise, is interesting: When it comes to politics, Republicans like to talk about culture war stuff. When it comes to governance, they tend to prioritize regressive economic policy.

The newly renamed committee’s website explains why the change was made:

“Labor” is an outdated term that excludes individuals who contribute to the US labor force but are not classified as regular employees. “Work” also carries a negative connotation that ignores the dignity of work; the term is something out of a Marxist textbook that fails to capture the achievements of the full spectrum of the American workforce.

One thing to note here is that this narrative is historically illiterate. The Republican Party’s first presidential campaign ran under the slogan “Free Land, Free Labor, Free Speech, Free Men, and Fremont,” fitting the fledgling party’s ideology with the name of John C. Fremont, its standard-bearer. . In 1861, Abraham Lincoln argued, “Capital is only the fruit of labor, and would never have existed if labor had not first existed.” Twelve decades later, in a speech to the AFL-CIO, Ronald Reagan said, “America depends on the work of the workforce, and the economy we build must reward and encourage that work as our hope for the future.”

The notion that only Marxists care about work is closer to Marxist propaganda than anything else. But (note the new headline) Education and Workforce Chairman Virginia Foxx and her House colleagues are trying to send voters a message about the direction of the post-Trump Republican Party.

As the party has come to lean more on less educated and more culturally conservative voters, some have argued, it should look more after the economic interests of the working class. Oren Cass, a former adviser to Mitt Romney and Marco Rubio, has made the case for “a conservative labor movement” and tried to interest Republicans in the idea of ​​legislative changes that could revitalize private sector unions while also changing how they work in address some conservative criticism.

More broadly, the party has moved away from its previous emphasis on spending cuts and “job creators”. Now she tends to favor a cultural politics that positions Republicans as defenders of women’s sports rather than apostles of right-wing economics. This populist turn was always subtle — it’s no coincidence that the main legislative achievement of Donald Trump’s presidency was a corporate tax cut — but after the 2018 midterm elections, Republicans really focused on cultural issues more than economic ones.

The labor vs. labor feud is just the most obvious sign that the new post-Trump party is an awful lot like the old pre-Trump party. The first piece of House Republican policy legislation was a proposal to cut IRS funding to make it harder to catch business owners who cheat on their taxes. Because the bill would result in reduced compliance, the Congressional Budget Office says it would increase the deficit by about $111 billion over 10 years. At the same time they are increasing the deficit by defining the tax police, Republicans are laying the groundwork for a war over the debt ceiling in which they will (in one form or another) demand a cut-all approach.

But there is an even more surprising example of the priorities of the conservative movement. As a condition of agreeing to Kevin McCarthy’s acceptance into the House Speakership, the House’s right-wingers secured a commitment to a floor vote on a ridiculous proposal they call the Fair Tax Act.

The legislation would replace the current income tax, payroll tax and wealth tax with a national sales tax of 30%. Except to make it sound better, Fair Tax advocates call it a 23% tax. Their logic is that if something sells for $100 plus $30 in tax, then it’s a 23% tax – because $30 is 23% of $130.

That’s not how tax rate calculations work. The reason for this dodgy math is that they are trying to obscure the reality that this plan would make most people worse off. According to the Tax Policy Center, in 2018 the middle quintile of the income distribution paid 8.9% of federal taxes while earning 15.2% of national income. Shifting this to a consumption-based flat rate would be a tax hike on those middle-income families and an even bigger hike on the bottom 40%. Offsetting those higher taxes for the majority would be a windfall for higher-income Americans, especially the small minority who stand to inherit multimillion-dollar fortunes.

The shift to a consumption-based taxation system has considerable theoretical support in the economic literature. And it is entirely possible to create a consumption tax with a progressive structure. But fair tax proponents don’t want to—for them, the inegalitarian implications of their proposal are a feature, not a bug.

There is certainly no chance that the Fair Tax Act will become law. But these kinds of message votes are important statements of values ​​and priorities. As with the tilt against the word “jobs,” an influential group on the American right sees any concern for economic justice as illegitimate.

Republicans are interested in cultural populism as a means of winning elections. But nothing has really changed in their habit of dividing the country into “makers” versus “takers” – and siding with the owners of capital.

More from Bloomberg Opinion:

• IRS Needs Billions to Make Trillions: Alexis Leondis

• Republicans in Congress have an ethics problem: Julianna Goldman

• Why Donald Trump is really a populist: Francis Wilkinson

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This column does not necessarily reflect the opinion of the editorial board or of Bloomberg LP and its owners.

Matthew Yglesias is a columnist for Bloomberg Opinion. A co-founder and former columnist for Vox, he writes the Slow Boring blog and newsletter. He is the author, most recently, of One Billion Americans.

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