Last Thursday the GOP unveiled its craven plan for tax reform, a pro-business, pro-elite assault on the poor of this country.
The televised roll-out, hosted by Speaker of the House Paul Ryan, framed the legislation in the tired Washington-speak of helping working families and economic dogma. “The Tax Cut and Jobs Act will deliver real relief to people in the middle, people who are also striving to get there,” Ryan said.
In his next breath, Ryan beamed while describing the meager tax cut a median income household would receive. “The typical family of four will save $1,182 a year on their taxes,” he said. For anyone with a calculator, the Speaker of the House bragged about giving a family living off $59,000 annually before taxes a daily tax break of $3.
Ryan's ideology stems from a long project of conservative economic theory that few contextualize. The content of the tax plan, for one, is the logical conclusion of any libertarian, anti-government economic vision.
Under this plan, the corporate tax rate will be slashed from 35 percent to 20 percent. Adhering to economic dogma, lower taxes means “job creators” will take their profits and raise wages for workers or create jobs out of the goodness of their hearts.
Other provisions of the law include abolishing the estate tax, which only kicks in for those inheriting over $5 million, and ending the ability to deduct student loan interest off of tax returns.
The kicker of this tax plan is its ramifications for the federal deficit. Such dramatic cuts would result in $1.5 trillion in unfunded liabilities, a figure that proves Republicans do not care about fiscal responsibility.
This is a classic Republican scheme. Since former President Ronald Reagan, the GOP’s one trick has been slashing taxes by huge amounts and boosting the military budget.
When the government becomes complacent due to a deliberate tightening of revenues, the conservatives then have the excuse to terminate every environmental regulation, labor rule or social safety net they can think of.
“Ronald Reagan proved that deficits don’t matter,” former Vice President Dick Cheney once said.
Like Reagan, the current GOP’s increases in military spending shows the tactic of bankrupting the government through tax cuts is making a big comeback.
There is a deep societal dysfunction that allows such savage class warfare to be waged out in the open.
There is no greater culprit than the economic dogma enshrined into scientific law over the past 30 years by academic institutions like the Kelley School of Business.
Only misguided, ideologically-driven economic theory would look at the productivity revolution of previous decades and the resulting wage stagnation and swear that wages rise with productivity. One could suggest raising the minimum wage to counteract this, but economic theory has a ready-made excuse as to why this can’t be done either.
We must reexamine our approach to economic theory and reflect on how institutions like the Kelley School of Business make the GOP tax plan possible.
luwrobin@indiana.edu
@lucas__robinson
