Opinion | Whoops! The GOP accidentally admits tax cuts don’t pay for themselves.

Authored by washingtonpost.com and submitted by semaphore-1842
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At long last, Republicans have admitted the obvious: Tax cuts don’t pay for themselves. Also: Republicans don’t actually care whether tax cuts pay for themselves. The House rules package recently passed by the newly GOP-controlled House included some notable, occasionally troubling things. For example, one set of measures would kneecap congressional ethics probes. Another provision would make it harder to swiftly raise the debt ceiling.

But also tucked into the rules package, and attracting somewhat less attention, was a change to how lawmakers treat changes to tax law.

Specifically, they’ve rigged the system so that tax cuts will be much easier to pass, and tax rate increases harder to pass. On the other hand, investments in the poor and various other kinds of spending increases — on so-called mandatory programs, such as Medicare or food stamps — would be more challenging to get through.

Congress sets rules for what kinds of budgetary changes it can pass under what circumstances, including what kinds of programs must be “paid for” by nipping and tucking elsewhere in the budget. Often, lawmakers want to change the law in a way that would cost money (i.e., increase deficits), either by reducing tax revenue or increasing spending. In recent Congresses, when lawmakers made that kind of change, they were generally supposed to find something to offset the cost so that long-term deficits didn’t grow.

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For example, if Congress wanted to cut Tax A, it was supposed to cut Spending Program B or else raise Tax C by at least as much (with some exceptions, of course).

This GOP-led House has done something a bit different.

Under the new rules package, the budgetary requirements are more one-sided — in favor of tax cuts. Going forward, tax cuts do not need to be offset with any sort of savings elsewhere in the budget. They can add trillions to the debt. No problem.

But this is not true of spending programs. Spending program increases still have to be paid for.

Not only that, but the savings to offset expansions of mandatory programs have to come from cuts to other spending programs. They cannot be offset by tax revenue increases. In practical terms: An expansion of food stamps can’t be paid for by raising taxes on the rich — only by cutting, say, Medicaid or disability benefits. So basically any attempt to provide more support for poor or middle-income people is likely to come from other programs that help those same groups.

House Republicans can theoretically choose to waive their own rule, though getting the votes to do so might be a bit rocky since they passed this big new rules package so recently and after much haggling.

Republicans have found other ways to stack the deck against raising taxes. A separate portion of the House’s rules package says that any increase in tax rates would require a three-fifths vote (rather than a simple majority, as in years past).

Additionally, in a side deal that Kevin McCarthy (R-Calif.) made as part of his concessions to get the speaker’s job, the House will also substantially cut spending for so-called discretionary spending programs, too. (Mandatory programs, such as Social Security, are generally set by formula, automatically expanding or shrinking based on how many people qualify; a specific dollar amount is appropriated for discretionary programs.)

There are a couple of big takeaways from these technicalities.

First is that, if you read between the lines, you’ll learn that even Republicans don’t believe their own long-standing promise that tax cuts will pay for themselves. After all, if the GOP genuinely believed this, they wouldn’t need to make it easier to pass tax cuts that don’t pay for themselves. Because such tax cuts … would not exist.

Second is who and what they care about.

“This is fundamentally about who pays for what, what are we investing in, and who’s left behind,” said Joel Friedman, a researcher for the Center on Budget Policies and Priorities. “It puts up barriers to the type of investments and public services that will help people through health care, education, supporting kids.”

As a result, we can expect more kids and poor families to face hardship, particularly if there is a downturn this year; and perhaps (even more) tax cuts for the rich.

Already, House Republicans have voted to effectively decrease the tax burden on the wealthy in all but name. They did so not by cutting tax rates, per se, but by voting to defund the Internal Revenue Service. Last year, Democrats gave an extra $80 billion to the IRS, largely to go after wealthy tax cheats whom the agency has struggled to audit because of insufficient resources; Republicans are now trying to undo this investment.

Show me your budget, and I’ll tell you what your priorities are, President Biden often says. Well, Republicans have shown us: a lower tax burden on the rich, less help for the poor and the middle class.

mojomonkeyfish on January 13rd, 2023 at 14:54 UTC »

Silly. The tax cuts more than pay for the campaign contributions.

Legitimate-Tea5561 on January 13rd, 2023 at 14:32 UTC »

GOP: Middle class happily pays for tax cuts to the rich.

semaphore-1842 on January 13rd, 2023 at 14:27 UTC »

Also: Republicans don’t actually care whether tax cuts pay for themselves.

“This is fundamentally about who pays for what, what are we investing in, and who’s left behind . . . it puts up barriers to the type of investments and public services that will help people through health care, education, supporting kids.”

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