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How tax cuts for the wealthy became Republican orthodoxy

- December 21, 2017

The Republican Congress has passed a tax plan in which more than four-fifths of the long-term tax cuts are steered to the extremely wealthy, and are offset by future tax increases for a significant fraction of the party’s own voting base. Republicans plan substantial cuts to government services that those voters use and like.

This kind of “reverse Robin Hood” upward distribution has become the unifying goal of the Republican Party. The current GOP’s tax plan is the latest iteration of a decades-long rightward trajectory.

The rise of partisan combat over taxes

Tax cuts were not always Republican orthodoxy in postwar America. Concerned about balancing the budget in the 1950s, President Dwight D. Eisenhower repeatedly opted against cutting taxes. More broadly, tax policy was just not a controversial partisan issue back then; taxes were hardly mentioned in either party’s platforms, political speeches or campaign ads in the mid-20th century.

A stalling economy in the 1970s, however, helped fuel partisan disagreement on taxes. Homeowners’ desires for protection against a runaway housing market sparked passage of Proposition 13 in 1978, a property tax cap in California. Many politicians interpreted the revolt as a popular outcry against “big government.” Fed by white conservative backlash to the civil rights victories, conservatives found political profit in racially coded rhetoric that opposed shifting funds from “hard-working” taxpayers to “undeserving” welfare recipients.

“Anti-tax” activism in the Reagan era was stoked by long-standing white resentment to the extension of benefits to people of color, a political dynamic with a very long history in the United States. Indeed, the white-supremacist governments in the post-Reconstruction South described themselves as a return to the “rule of the taxpayer” — that is to say, rule by wealthy white plantation owners to the exclusion of newly emancipated black people and poor whites.

During that post-civil-rights-era backlash, wealthy activists who had long abhorred the federal income tax pushed for lower taxes. Rich people’s movements to “un-tax” the very wealthy succeeded when they could find allies outside of the wealthiest 1 percent of the population. The racialized anti-welfare fervor of the early 1980s provided just such a constituency. Starting in the early 1980s, the Republican Party began to rely on an alliance of wealthy corporate interests and rank-and-file conservatives that could be motivated by white identity politics and cultural concerns.

Fissures in the GOP tax movement?

My research on the tea party found that that GOP alliance has remained politically durable, even as priorities of the grass roots and the elites have diverged. Most grass-roots tea party activists were primarily concerned about cultural issues and immigration, and supported the big social safety net programs like Social Security and Medicare (at least when those programs benefited people they saw as deserving). By contrast, elite actors associated with the tea party, like the Koch-funded Americans for Prosperity, focused on tax cuts and corporate deregulation. Nonetheless, grass-roots and elite branches of the tea party worked together effectively to stymie Barack Obama’s agenda in 2009 and 2010.

But the base and the leadership of the Republican Party have not been equal partners in advocating for the current tax bill. Most Republicans do not believe corporations or wealthy people should get a tax cut. Only about half of Republicans think that the current tax legislation will help them personally.

But tax policy is complicated. There are good reasons to believe that voters can be misled by partisan media and self-interested elected officials about the effect of tax policy. It is not at all obvious that voters will get the accurate information they need to be able to assess the legislation passing this week, or to hold their elected officials accountable for their votes. So legislators who prioritize their donors may have relatively little to fear from their voters.

And in these highly partisan times, it may be especially unlikely that policy will affect public attitudes. Remarkably, even though Republican voters neither agree with the tax bill’s major provisions nor expect to see benefits from the tax bill, a strong majority has come to support the legislation.

Moreover, in considering the interests of the base on the one hand and the business elites on the other, the GOP seems to be tilting more toward those at the top. Rising inequality, changes in how businesses engage in politics and new donor-driven GOP groups like the Koch network have helped tip the GOP toward far-right economic policies, even if Republican voters have other priorities. Far-right billionaires have instituted a remarkable top-down coordination between conservative funders, media, issue advocates and constituency mobilizing groups, and has helped crowd out more moderate voices that might otherwise have had a say in the party’s economic platform.

The end result is a political party that has moved ever rightward, with little political pressure thus far to draw them back to the political center

Vanessa Williamson is a fellow in governance studies at the Brookings Institution and author of “Read My Lips: Why Americans Are Proud to Pay Taxes” (Princeton University Press, 2017).