The passage of the most sweeping and disastrous tax plan in a generation is not just a defeat, it is a call to action for 2018.
Without doubt, opponents of the Trump tax plan have real reason to feel defeated: The tax plan favors corporations and billionaires and will even raise taxes on the bottom 60 percent of earners in 2027; it lowers the corporate tax rate from 35 percent to 21 percent without closing major loopholes, as Trump had promised to do on the campaign trail; and it opens a $2 trillion hole in the national debt that conservatives will use to spur cuts to government benefits like Medicare and Medicaid.
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But the tax plan is just one part of the Trump agenda, with more to come. There are reasons to look forward to better chances for success in the fights of 2018 (and beyond), and chances to set the stage for more progressive policies — including tax policy — in the years to come.
No Cutting Medicare, Medicaid and Social Security to Pay for Tax Cuts
Cutting taxes is one major pillar of the modern conservative movement — now achieved. Cutting government benefits under programs like Medicare, Social Security and Medicaid is another. Having accomplished one of their main goals, Republican leaders are now openly proclaiming that cuts to Medicare, Medicaid and Social Security are their next priority.
Protecting Medicare, Medicaid, Social Security, and a range of other programs, including food assistance and traditional welfare for low-incomes families, will become a major priority for progressives in 2018.
The tax plan, as passed, will result in an automatic $25 billion in cuts to Medicare unless Congress takes action.
These programs benefit millions of Americans, and most Americans will rely on one or more of these programs at some point in their lives. Medicare and Social Security are also the only government programs that Americans routinely pay into through payroll taxes before they are eligible for benefits.
This will be no easy political feat. If the Trump tax plan was unpopular (and it was), cuts to Medicare and Social Security are even less popular — especially if those cuts are seen as helping to pay for tax cuts for the rich. A majority of voters — Democrats, Republicans and Independents — oppose cutting Medicare, Medicaid or Social Security to pay for tax cuts.
The very first legislative battle on this front is defending Medicare: Due to a preexisting law, the tax plan as passed will result in an automatic $25 billion in cuts to Medicare unless Congress takes action. Making sure Congress takes this action is a short-term priority. There are signs that Rep. Paul Ryan, at least, is treading carefully here: He has promised these cuts won’t be allowed to happen.
Looking ahead to 2018, priorities must include the defense of Medicaid, welfare and programs that help the lowest-income Americans — a particular target of both Paul Ryan and President Trump.
Real Growth: It’s Still the Economy
There are growing signs that Trump’s tax reform won’t lead to the blossoming of jobs and wages that has been promised, but instead to more profits for corporate shareholders. And, now that the tax bill has passed, the evidence will become even clearer as the law takes effect.
Repeal and replace didn’t work for the Affordable Care Act. But it can work for the Trump tax plan.
One antidote to the false promises of economic growth is creating real growth and opportunity. In 2018, progressives should double down on calling for policies that would bring about real equality and opportunity: from raising the minimum wage to helping families with child and elder care, from investing in infrastructure and clean energy to making higher education truly affordable, there are real solutions to the populist hunger for real opportunity and greater economic equality.
Superficial strength in economic indicators shouldn’t divert from this effort. While the stock market, unemployment and overall economic growth as measured by Gross Domestic Product (GDP) are all moving in the right direction, none of this has changed the fundamental truth that inequality in the US has been growing for decades, with no end in sight.
A real agenda for economic opportunity will put the tax plan in an increasingly realistic light, clarifying who the real intended beneficiaries of the Trump tax plan are.
Ready, Set, Replace the Trump Tax Plan
Repeal and replace didn’t work for the Affordable Care Act. But it can work for the Trump tax plan. Job creation, health care, education and other government programs do cost money, and a fair, equitable tax plan is the answer to making these policies a reality.
One big difference between the doomed repeal and replace effort for the Affordable Care Act, and the one for the Trump tax plan, is the existence of a real, well-articulated alternative. Conservatives did not have such an alternative plan for the Affordable Care Act. For the Trump tax plan, progressives do have real alternatives.
Proposals like the People’s Budget from the Congressional Progressive Caucus provide a blueprint. The plan would:
• Put in place real provisions to stop US corporations from offshoring — avoiding taxes — on hundreds of billions of dollars in profits each year;
• Introduce a financial transaction tax for stock market transactions and a financial institute excise tax for financial institutions, taxing Wall Street to fund Main Street;
• Introduce a new top tax rate of 49 percent for billionaires (compared to the 37 percent in the Trump tax plan) — still lower than the top tax rate at the time President Ronald Reagan took office, at fully 70 percent.
These measures, and others like them — including changes to the estate tax, the taxation of capital gains, and other measures — would raise trillions of dollars in revenues under a more fair system that asks corporations and the wealthy to pay their fair share.
Onward to 2018
This loss is not an ending. It’s a beginning. Progressive movements have built a framework through resistance to this tax package that both garnered results — some disastrous proposals like the one to count graduate students’ tuition as income were ultimately dropped — but more importantly, they provide a deep and broad base for resistance along new fronts in the coming year.
The fight against the tax plan saw demonstrators arrested at the Capitol, and activists gather on moment’s notice to greet Sen. Jeff Flake at the airport in his home state of Arizona. Opponents of the tax plan displayed tremendous organization, ingenuity and energy that they can take into these next battles. The resistance of 2018 is ready for action.