Now What?

At least we got a tax cut

OK, so apparently the Senate tax bill will have to be worked out in conference with the House bill instead of simply passed unchanged by the House.  The Senate Republicans apparently made a little mistake on corporate taxes. 

When Trump calls the U.S. the highest taxed nation in the world, he is clearly wrong, but he does have one point.  Our corporate tax rate of 35% really is high.  Of course, corporations take advantage of enough deductions that the actual rate they pay is less than that.  In order to prevent corporations from getting out of taxes altogether, our current tax code has a corporate Alternative Minimum Tax (AMT) of 20%, so that if a corporation has enough deductions to pay less than a 20% tax, it pays 20% instead.  A major part of the tax bill was to lower the corporate tax rate to 20%.  The plan was also to eliminate the corporate AMT as well.  However, arcane Senate rules that I still don't understand limit how much revenue the Senate bill can cost and still pass by a simple majority.  In order to slip in under the ceiling, the Senate put the AMT back in the bill.  In their haste, however, they forgot to lower the rate below 20%, so that they accidentally enacted a 20% corporate flat tax.  Oops!

So now the conference committee is trying to come up with something that can pass the House, where the Freedom Caucus is a firm believer in letting the perfect be the enemy of the good (or bad, as your opinion may be), and the Senate where arcane rules limit what can by passed with a simple majority and three defections can sink the bill. 

I am of mixed feelings about the outcome.

On the one hand, there is no doubt to my mind that if this monstrosity passes it can cause serious and untold harm.

On the other hand, the only way in the end that we are going to harm Republicans' political fortunes is to allow them to harm their followers.  If only we could prevent collateral damage.

But in the end, the question is what long-lasting legacy this bill will have.  It looks to me very much like an attempt to starve the beast, i.e., to cause enough damage to the government's finances to ensure that when Democrats are next in power they won't be able to achieve anything. 

Attempts to strip 20 to 30 million people of their health insurance with the repeal of Obamacare will certainly be unpopular and will lead to major Republican electoral losses.  But stripping 20 to 30  million people of their health insurance will also create a big enough mess to have at least three big advantages for Republicans:

1. Wrecking things is much easier than building them.  Because stripping 20 to 30 million people of their health insurance is easier than creating a system to insure them, Republicans can be confident that they will have raised the number of uninsured for a very long time.
2. Democrats' inability to clean up the mess fast enough will be great fodder for a campaign against them and will return Republicans to power.
3. Democrats are now on warning.  If by some miracle they actually do succeed in building a new system for insuring millions, Republicans will just blow it up as soon as they are back in power.  That should act as a significant deterrent.

And that was just Obamacare.  This starve-the-beast tax cut looks like an attempt to do the same hting on a much larger scale.  Which is more than enough to convince me to oppose it.