ANALYSIS: Republican tax cut trades economic populism for legislative win

“Results are going to make this popular,” House Speaker Paul Ryan said Tuesday.

— -- A majority that’s been defined by inaction will now be defined by action – a far-reaching and partisan action with unpredictable political consequences.

To Republicans, the tax overhaul heading toward President Donald Trump’s desk is a promise kept, and a gift that will keep on giving. They argue that fulfilling the GOP’s vision of lower taxes will spur economic growth – “rocket fuel” for the economy, in the president’s telling, that will spill into bank accounts large and small.

“Results are going to make this popular,” House Speaker Paul Ryan declared today.

But to Democrats and some moderate voices in the GOP, the tax bill is a Trump-era trap that could spark a voter backlash.

It is telling that not a single Democrat was tempted to vote yes. The only votes that broke against party lines coming from a dozen House Republicans who voted “no.”

The danger for Republicans is deeper than passing an unpopular bill along party lines. It’s in passing an unpopular and partisan bill that turns Trump’s own brand of economic populism on its head.

“The GOP tax scam is not a vote as an investment in growth or jobs,” said House Democratic Leader Nancy Pelosi. “It is a vote to instill a permanent plutocracy in our nation.”

The Democratic argument will be that the bill does deliver — for the wealthier and the best-connected. It does not simplify the tax system, and will almost certainly not bring substantial cuts to millions of Americans, according to a host of independent analyses.

The corporate tax cut in the bill is deep and permanent. Individual tax cuts are small by comparison, and – at least as written – designed to be temporary.

The catalog of unfulfilled promises is lengthy. Nobody will be filing taxes on a postcard, as the president and House speaker once promised. Most existing loopholes and deductions are surviving, with some new ones sprinkled in going forward.

One big deduction is being dramatically limited. The cap on deductions for state and local taxes means millions of middle- and upper-middle income taxpayers will wind up paying more than they do now. That’s a key reason that Republican House members from high-tax New York, New Jersey, and California joined Democrats in voting against the bill.

The president’s flat declaration – “Everybody gets a tax cut” – will simply prove untrue.

Ditto another presidential promise: “The rich will not be gaining at all with this plan.” The White House today was forced into rhetorical contortions to argue that the president himself won’t get a massive tax cut – a claim cannot be proven unless or until the president releases his own tax returns.

“We expect it will likely - certainly on the personal side, could cost the president a lot of money,” White House Press Secretary Sarah Sanders said.

Aside from taxes, the bill eliminates the individual mandate under Obamacare, a move that’s expected to result in 13 million fewer Americans having insurance coverage, according to the Congressional Budget Office. That’s expected by experts to also disrupt insurance markets, spiking premiums on the individual market.

The legislative victory is a welcome one for a Republican Party that has been struggling to pass its own agenda this year. Ryan, who has made tax reform a central goal of his nearly two decades in Congress, banged the gavel so hard in announcing the vote that it skipped off the podium entirely.

But legislative achievements are not necessarily the same as political wins. It’s a lesson Democrats learned the hard way under President Obama, and a lesson that has new relevance in the era of Trump.