Email #332: “benefit of hindsight”?

The day after the GOP released its tax plan last week, the first national poll showed that only 33% of Americans support it, while 50% oppose it. Though you have said it’s designed to help the middle class, 60% see that it favors the wealthy.

Why aren’t Americans coming together to support this bill? President Trump wrote in USAToday on October 22, the anniversary of President Reagan signing the Tax Reform Act of 1986:

“Republicans and Democrats came together to cut taxes for hardworking families in 1981, and again in 1986 to simplify the tax code, so that everyone could get a fair shake… We have the benefit of hindsight as we look back at the three decades since our country’s last major tax reform. We can see what worked and what did not.”

The President is right. Republicans and Democrats did come together in 1986, and we should use the benefit of hindsight to understand why that worked.

The 1986 Tax Reform closed loopholes, increased personal exemptions, increased standard deductions, and even increased the capital-gains tax, balancing the revenue lost from reduced corporate taxes and so keeping the deficit under control. This balanced approach resulted in the bill passing by wide margins, 292 to 136 in the House and 74 to 23 in the Senate. This was despite Democrats holding a majority in the House and nearly half the seats in the Senate—where they soon took a 5-seat majority in the elections held two weeks after the tax reform was enacted.

The so-called Reagan tax cut was a bipartisan bill sponsored by a Democratic senator and a Democratic representative and passed by more Democratic votes than Republican. When President Reagan signed it into law, he was surrounded by both Democrats and Republicans. Even opposition was evenly split with 11 Republicans and 12 Democrats voting against the bill. In the House, 86 Republicans and 74 Democrats opposed it too.

In contrast, the proposed Trump tax plan has attracted no Democrats and has already lost the votes of 21 Republicans, while others approved its budget blueprint while expressing serious misgivings. Instead of seeking bipartisan compromise, Senate Republicans enacted special budgetary rules that would enable a tax bill to pass by 50 instead of 60 votes–the same approach they applied to repealing Obamacare and failed. Instead of modeling the proposal on Reagan’s aisle-bridging and revenue-balancing approach, President Trump and GOP leaders are attempting to push through an exclusively partisan and deficit-expanding bill in a matter of weeks. The 1986 plan took nearly two years.

Why isn’t the GOP following President Trump’s advice and using the benefit of hindsight to see what worked then and so what is not working now?

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Email #331: “the unfair estate tax”?

According to the Republican tax plan revealed yesterday, the estate tax will be eliminated immediately for inheritances smaller than $11 million (double the current cut-off), and then after six years eliminated for all inheritances no matter how large.

Anticipating this proposed change, you said on September 29:

“I am also pleased to see an elimination of the death tax, which unfairly targets family farms and small business owners.”

You are either grossly misinformed or this is an intentional lie. The estate does not target family farms and small businesses. It hardly affects any family farms and small businesses at all.

President Trump made the same lie two days earlier in his September 27 speech in Indianapolis:

“To protect millions of small businesses and the American farmer, we are finally ending the crushing, the horrible, the unfair estate tax, or as it is often referred to, the death tax.”

Currently the estate tax only applies to the 5,460 Americans whose estates are worth more than $5.43 million. How many of those millionaires are family farmers? According to Political Fact-Check: only 16-24 total estates. That’s why the website gave Bill Maher a “Mostly True” rating when he said: “More astronauts have been to the moon than farmers who paid the inheritance tax in 2013.”

According to the Tax Policy Center, only a total 80 farms and small businesses will pay the estate tax in 2017. But the President said he wanted to repeal it in order to protect “millions of small businesses and the American farmer.” Describing 80 as a minimum of 2,000,000 is not merely an exaggeration. It is a lie.

According to the U.S. Census Bureau, there were 27.9 million small businesses in the U.S. in 2010. Even if you don’t subtract the 16-24 family farms, the difference between 80 and 27,900,000 is even greater than the President’s lie. The overwhelming majority of small businesses are not affected by the estate tax. And yet you say they are the “targets”?

According to the Joint Committee on Taxation, repealing the estate tax will cost about $270 billion in lost revenue over the next ten years. Farms and small businesses will account for less than 1/5th of 1% of that total. Repealing the tax will not help “family farms and small business owners.” It will instead help the multi-millionaires the tax currently targets.

Why are you so desperate to repeal the estate tax that you are willing to tell such verifiable lies?

Email #329: “end of us as a party”?

According to an October Gallup survey, 84% of Americans think “the most important problem facing America today” is non-economic, and dissatisfaction with poor government leadership tops the list at 20%. Of the 17% who think the most important problem is economic, unemployment and the state of the economy in general each hit 5%, and the national debt 4%.

Only 2% named taxes.

And yet you and other Republicans in Congress have made taxes your number one issue. I understand that, despite the distraction of the special counsel indictments on Monday and the death of eight people in a terrorist attack in New York yesterday, Congressional leaders are releasing their full tax bill today.

My main confusion is how tax cuts became so much more important to you than the national debt. Despite decades of criticizing Democrats for deficit spending, both House and Senate Republicans voted for a budget blueprint that would raise the national debt by $1.5 trillion. It passed by only two votes in the Senate and four in the House. Only twenty House Republicans and one Republican Senator opposed the resolution, including the conservative House Liberty Caucus. Rep. Gaetz said members were “asked to vote for a budget that nobody believes in so that we have the chance to vote for a tax bill that nobody’s read.” Centrist budget hawk Rep. Jenkins agreed: “We should be passing a budget that reforms mandatory spending and balances over time.”

Why were you not one these principled critics? You have spent a quarter century advocating for debt reduction and balanced budgets, but when the defining issue of your career conflicted with tax cuts, you went with tax cuts.

The deficit grew by $666 billion in 2017. That’s $80 billion more than in 2016. According to the Congressional Budget Office, the national debt will rise $10 trillion over the next ten years. That’s based on current projections, but if the tax cuts are passed, the projections are significantly worse. The CBO recommended two actions: cut spending and increase revenues. Instead the budget blueprint decreases revenue by $1.5 trillion and only makes suggestions for spending cuts—ones that will be nearly impossible to enact afterwards. Do you believe Americans will accept cutting $470 billion from Medicare and $1 trillion from Medicaid?

And yet you voted for the resolution, ignoring the following argument:

“It is a simple concept — you can’t spend more than you take in.  Business owners, individuals and families all across this country understand this concept and live by it in their own lives.  They should expect nothing less from the federal government and yet Congress continues to prove it cannot make the tough decisions on its own.  We must rein in the skyrocketing deficit spending that is discouraging investment and threatening to bankrupt our nation.”

You wrote that. The paragraph appears on the “Fiscal Responsibility” page, which still also refers to President Obama as though he were still in office, continuing evidence that you no longer care about balancing the budged and reducing the debt.

You of course are not alone in embracing the GOP’s new policy of fiscal irresponsibility. Rep. Black, chair of the House Budget Committee, criticized the budget blueprint when it was still in the Senate, tweeting: “What part of ‘cut spending’ does @SenateGOP not understand?” And yet she, like you, still voted for it in the House last Friday.

Senator Graham endorsed it out of fear of angry voters: “This is the last, best chance we will have to cut taxes. That will be the end of us as a party, because if you’re a Republican and you don’t want to simplify the tax code and cut taxes, what good are you to anybody?”

But only 2% of voters are calling for tax cuts, while 20% want better leadership from their government, making the GOP tax plan a double failure. Will you continue to support it?

Email #314: “we’re being fiscally irresponsible”?

“What happened to him? He used to be the fiscal hawk.”

That’s what Republican Senator Corker said of your former House colleague, Budget Director Mick Mulvaney. But Corker could have been talking about almost anyone in the GOP right now. After decades of a seemingly principled stance against deficit spending, many Republicans are suddenly abandoning that position in order to push through what apparently has always been more important to them: tax cuts.

Former fiscal hawk Rep. Womack said: “In order to make good on our campaign tax promise, there probably are going to be some sacrifices made from an ideological perspective.” Do you agree that abandoning your career-long opposition to deficit spending is a necessary “sacrifice”?

Some of your Republican colleagues are rationalizing it with predictions of extraordinary tax-cut-triggered economic growth, even though economists disagree. Senator Johnson said: “Just agree we’re going to lose money on a static scoring basis. I’m happy to live with a $2-3 trillion static loss.” Are you also “happy” with the national debt rising to $2-3 trillion?

At least some of your colleagues are resisting these optimistic predictions. Rep. Dent said: “I don’t want to be overly optimistic about how much growth will be generated.” And Senator Young said: “we can’t assume unreasonable rates of economic growth or we’re being fiscally irresponsible.”

But other former fiscal hawks now think fiscal irresponsibility is okay. Rep. Meadows said: “you have to mitigate the damage by being as aggressive as you can be on tax rates, which would lessen the damage of our lack of fiscal responsibility over time.” Do you also hope to lessen the damage of your lack of fiscal responsibility?

I wrote to you in September that your staff hasn’t updated the “Fiscal Responsibility” page of your website since President Trump took office. It still refers to Obama as our President. I guess you and your staff are too busy trying to pass deficit-expanding tax cuts to even pretend that you still care about your career-long commitment to eliminating the deficit?

Term limits and fiscal responsibility were your defining positions when you entered office a quarter century ago. What other core values are you willing to “sacrifice” next?

Email #299: “everyday American workers”?

The President says “the biggest winners” of his tax plan “will be the everyday American workers.” You prefer the phrase “hardworking families,” but they won’t be the winners either. These are just PR phrases designed to sell a tax plan to voters who won’t benefit from it.

How does the elimination of taxes on large inheritances help everyday American workers and hardworking families? The current estate tax only applies if an estate is over $5.45 million. If you’re inheriting that much, then you’re not an everyday worker. I believe your own net worth is in that low multi-million dollar range, and so the elimination of the estate tax might be a huge benefit to your son in California but not to the vast majority of your constituents here in Virginia. The hardworking families in our district will receive nothing when you die.

And how does lowering the tax rate from 39.6% to 35% for the wealthiest individuals help everyday American workers either? Again, you and your family will personally benefit, but the majority of your constituents will not. If you and the President want to help hardworking families, why don’t you leave the high-income tax rate where it is and significantly drop rates for middle and working class Americans instead?

The President’s plan would also get rid of the alternative minimum tax, a measure that prevents wealthy Americans like you from ducking taxes all together. The easiest way to avoid the alternative minimum tax is to earn less $415,000, something everyday families do automatically. Once again, how does this help them?

So the President’s plan includes: 1) no estate tax for the wealthy, 2) a lower tax rate for the wealthy, and 3) no minimum tax for the wealthy. Could you please explain how exactly “the biggest winners” would be “the everyday American workers”? How does any of this help “hardworking families” at all?

 

Email #296: “a positive step forward”?

You said on Wednesday: “The tax reform framework unveiled today is a positive step forward in getting tax reform signed into law that lowers rates for individuals and families and helps level the playing field for American businesses.”

While I appreciate your optimism, I’m confused by how the Trump tax plan contradicts your dedication to debt reduction. The Senate Budget Committee resolution would reduce tax revenue by a $1.5 trillion over the next decade. Outside budget watchdog groups estimate the actual revenue loss would be more than $2 trillion. Previous tax plans put forward by the Trump administration had projected costs of $3 trillion and even $7 trillion. Whatever the revenue loss, that’s money added directly to the national debt.

According to the Committee for a Responsible Federal Budget: “The president and members of Congress have spent years warning of our large and growing national debt and have said their goal was to pursue tax reform that doesn’t make that debt worse. It is extremely disheartening that the Senate budget may be abandoning that commitment.”

According to the Peter G. Peterson Foundation: “Irresponsible tax reform is counterproductive and anti-growth because increasing the national debt hurts the economy. Tax reform should grow the economy, not the debt. This proposal fails the test of fiscally responsible tax reform.”

According to the Bipartisan Policy Center: “We are running a debt of $20 trillion-plus. We have to remember that debt is a tax on future generations, and so we talk about the immediate benefits, but also we have to recognize — if this added to the debt significantly, we are simply transferring a tax to future generations.”

And you said yourself: “It is a simple concept — you can’t spend more than you take in.” And the Trump tax plan will take in trillions less.

But it seems you no longer care about debt reduction–or you only care about it when there’s a Democrat is in the White House.

According to the “Fiscal Responsibility” page of your website: “Today, the national debt has soared well past a staggering $19 trillion. Our national debt has doubled since this Administration was elected to office, as the national debt was $9 trillion in 2008.” President Trump has been in office nine months now, but when you say “this Administration” you mean President Obama. You then brag about two balanced budget amendments that you introduced in 2015, describing one in the present tense as if it were still under consideration. It’s not. You even reference the 112th Congress—which ended in 2013.

With a Republican in the White House, I would think you would be excited about your annual ritual call for a balanced budget amendment. Instead, you literally abandoned “Fiscal Responsibility.” Are you planning on updating the page before this Congress ends, or will you wait until there’s a Democrat in the White House again?

Meanwhile, how can you say the government is taking “a positive step forward” when that step is toward an even higher national debt? Reducing the national debt is the signature issue of your quarter-century career in Congress. If you are willing to abandon it, what if anything do you represent?

Email #269: “middle-income tax cut”?

Given your career-long dedication to balanced budgets and deficit reduction, you must be very concerned about the President’s proposed tax plan. According to the Tax Policy Center, it would undermine efforts to balance annual budgets over the next decade by dropping revenues by $6.2 trillion, and it would raise the debt by $20.9 trillion come 2036.

Many of your GOP colleagues seem fine with that, since the plan also cuts taxes for the wealthiest Americans. Treasury Secretary Mnuchin said after the election: “Any reductions we have in upper-income taxes will be offset by less deductions so that there will be no absolute tax cut for the upper class,” insisting that the plan “is a middle-income tax cut.” But the Tax Policy Center instead found that “the largest benefits, in dollar and percentage terms, would go to the highest-income households.”

Secretary Mnuchin later rescinded the so-called “Munchin rule,” repeating at his Senate confirmation hearing only that: “If confirmed, I am committed to working with Congress to craft the best possible tax reform plan to serve all Americans.” Yet in that current plan, the top 0.1% Americans get a 14% tax cut, middle-earning American only 1.8%, and Americans in the lowest bracket less than 1%.

Speaker Ryan promised “to fix this nation’s tax code once and for all,” something that would be “absolutely transformational, something that will have a truly lasting impact.” Why then is the GOP approaching this “once-in-a-lifetime” opportunity through the special budgetary process of reconciliation? If the GOP leadership can’t convince sixty senators to end a potential filibuster, does such a “truly lasting” bill that changes the code “once and for all” deserve to move forward?

Although the Trump administration has abandoned its revenue-neutral pledge for the wealthy while also showing no concern for the expanding deficit, will you retain the conservative values that have defined your quarter-century career as a Congressman and oppose any tax bill that violates them?