If taxes the “thunder of world history,” what kind of history are the Republicans about to make?

by Corey Robin on December 9, 2017

Back in early January, I wrote:

Where all this will lead is anyone’s guess, but the most likely outcome is that Trump and the GOP will fall back on what Republicans know how to do best: tax cuts and deregulation.

It’s about to come to pass.

Schumpeter famously said that taxes are the “thunder of world history.” So what kind of history are the Republicans about to make?

Here I am in The Guardian, answering that question with four takeaways on the GOP tax bill.

Meanwhile, I just stumbled on this from last year: Paul Ryan, at CPAC, asking us to “take Obamacare—not literally, but figuratively.”

Never underestimate the philosophical impulse of the right.

Next he’ll be incanting, “A commodity appears, at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.”

Read the rest of Ryan’s comments where he criticizes school lunch programs: fills the stomach, empties the soul.

{ 18 comments }

1

Alex K. 12.09.17 at 5:59 pm

Rather, Schumpeter claimed that understanding the history of taxation is the best way to discern the thunder of history (p. 7). As he explains right after the thunder passage, “Most important of all is the insight which the events of fiscal history provide into the laws of social being and becoming and into the driving forces of the fate of nations, as well as into the manner in which concrete conditions, and in particular organizational forms, grow and pass away. The public finances are one of the best starting points for an investigation of society, especially though not exclusively of its political life.”

2

alfredlordbleep 12.09.17 at 8:25 pm

You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you.—v. Mises

The usual comeback, as applied to tax-free inheriting, is: self-reliance is for the poor, eh?

Secondly, the thing called Trumpcare was rightly called out at the time as a tax bill. This thing called tax reform is a Christmas tree bill with a big decoration of healthcare plunder.

It should have been clear that R control of government would mean the grabbers would be loose in a candy store.

3

Z 12.09.17 at 10:07 pm

So what kind of history are the Republicans about to make?

Almost completely OT (almost because there is method in Trump’s alternating domestic and foreign madness), but moving the American embassy to Jerusalem in the context of rising tension between Saudi Arabia and Iran could make for interesting history indeed.

4

Howard 12.09.17 at 10:26 pm

That Ryan bit is the first time I’ve ever seen “brown-paper bag” spelled with a hyphen. All my life I’ve been thinking it was just a paper bag that was brown.

5

Pavel A 12.10.17 at 12:33 am

Hopefully one where Ryan’s head gracefully rolls into a basket.

6

steven t johnson 12.10.17 at 1:40 am

I was trying to understand the OP, including it’s remarks on Ryan, followed the link. I asked myself how old a child remembers brown paper bags, or “brown-paper” bags, for that matter? I stumped myself so badly with that one I don’t remember what the OP was about.

7

alfredlordbleep 12.10.17 at 2:21 am

Continuing in the light vein here—in my comment above I befuddled myself with a Christmas tree bill (and how nice it’s OK to say Merry Christmas again)—to the point of not noticing that there are two such bills (House and Senate).

Thank you and to all a good night.

8

Peter T 12.10.17 at 6:41 am

Your Guardian piece ends with “The Republicans have shown us the money is there”. You misread them. The Republicans have shown us the money is there for them (or their donors). That does not mean it is there for others.

9

bad Jim 12.10.17 at 7:59 am

Once upon a time I flew halfway across the country in a private jet, a Cessna Citation 3, with my business partners and a couple of older millionaires who were interested in our little company. It was a congenial affair, but the accommodations were spartan, limited headroom and box lunches.

10

ph 12.10.17 at 8:58 am

Peak stupidity? Paul Ryan and the GOP would find it much more difficult to scam the public if the press would start reporting the news instead of serving as Trump’s punching bag by endlessly stepping on rakes. Glenn Greenwald notes that CNN, TPM, and scores of Dem operatives went wild over this story. If you’re expecting solid push back on the Ryan tax plan, instead you get media clowns endlessly stepping on rakes.

…Donald Trump Jr. had received advance notice from the anti-secrecy group WikiLeaks about a trove of hacked documents that it planned to release during last year’s presidential campaign. CNN’s erroneous scoop, about the email to Donald Trump Jr., rocketed around cable news and social media on Friday morning. But it fell apart after The Washington Post reported that the email — which included a decryption key to access hacked documents — was dated Sept. 14, not Sept. 4, as CNN initially reported. WikiLeaks publicized links to the documents in question on Sept. 13. (NYT)

Read the entire piece and watch the CNN clip to get a fuller sense of why Ryan et al win.

11

LFC 12.10.17 at 3:41 pm

The Republican tax cutters are (unwittingly) following a script written by, among others, J.S. Mill.

From Aaron Friedberg’s (Princeton prof, former aide to Cheney) first book The Weary Titan: Britain and the Experience of Relative Decline, 1895-1905 (Princeton U.P., 1988), pp. 93-4 (footnotes omitted):

Mill [in Principles of Political Economy, 1848] … pointed out that attention had to be paid not just to the rate at which taxes were levied but also to the manner in which they were applied…. Still, the greatest danger came from “excess of taxation,” which could “be carried so far as to discourage industry by insufficiency of reward.” Even before this point had been reached, Mill warned, such excess could “[prevent] or greatly [check] accumulation, or [cause] the capital accumulated to be sent to foreign countries.” For this reason taxation and the spending that might require it were best kept as low as possible.

12

alfredlordbleep 12.10.17 at 6:56 pm

Again from J. S. Mill’s Principles (unfiltered by Friedberg)

Book V Chapter II On the General Principles of Taxation
2.7
For what reason ought equality to be the rule in matters of taxation? For the reason that it ought to be so in all affairs of government. As a government ought to make no distinction of persons or classes in the strength of their claims on it, whatever sacrifices it requires from them should be made to bear as nearly as possible with the same pressure upon all, which, it must be observed, is the mode by which least sacrifice is occasioned on the whole. If anyone bears less than his fair share of the burthen, some other person must suffer more than his share, and the alleviation to the one is not, cæteris paribus, so great a good to him, as the increased pressure upon the other is an evil. Equality of taxation, therefore, as a maxim of politics, means equality of sacrifice. It means apportioning the contribution of each person towards the expenses of government so that he shall feel neither more nor less inconvenience from his share of the payment than every other person experiences from his. This standard, like other standards of perfection, cannot be completely realized; but the first object in every practical discussion should be to know what perfection is.

13

Suzanne 12.10.17 at 8:44 pm

@10: The U.S. media have generally been very good on how awful this bill is, particularly the NY Times, which has consistently been running front and inside page articles and editorials on the gory details. The grassroots resistance has not been equal to that for Obamacare repeal. The sex stories have also proved to be quite the distraction. (Which is not to say that sexual harassment is not a serious issue, only that it’s a serious issue that is not going away soon, while in the fight over this tax bill, time is crucial.)

14

Keith 12.10.17 at 9:54 pm

At least Marie antoinette would let the starving eat brioche in an emergency! What a bunch of nasty shits you have in the GOP with tories in the Uk vying to copy them each day with food banks britain.

It is dispiriting to see the politics of pre revolutionary france play out in a country which is supposedly a republic. The french aristos after all payed no tax as there were no elections to any national parliament. Feudalism was traditional unlike in the USA. The delusion that inheriting wealth makes you a better human than those who do not do so is morally outrageous. It recalls the objection to paying for miners to have baths in their homes as they would obviously only store coal in them. Off course if the tax cut passes the capitalists and their gurus will stoke up a economic crisis as they always do. Then we will be told when the system needs rescuing that there is no money for meeting human needs. First you cut income and wealth taxes then you inflate a boom then the crash follows again.

15

Pavel A 12.11.17 at 1:45 pm

@Keith

By all accounts, Marie Antoinette was a far less worse human being than Paul Ryan. Ignorant and misguided sure, but not actively malicious.

As foolish as it is to try to predict the future, I can’t see the US emerging on the other side of the next five to ten years without spilling blood. Americans will either realize how stacked the system is against them, or will be pushed up against the wall by automation, wealth transfer and climate change. At that point they will have to start killing capitalists and seizing the means of production, or lose any hope of ever regaining social/political control of any kind. I imagine 2018/2020 will be a sort of inflection point. If the centrists (I don’t expect the left to actually sweep into power just yet) can seize power and do something useful with it (like begin a program of rolling back capital and re-creating at least the welfare state), perhaps bloodshed can be avoided. Otherwise, start building those Fully Automated Green Guillotines™.

16

Lee A. Arnold 12.11.17 at 2:29 pm

In the short term, the U.S. tax cut bill might help the Republicans, or hurt them.

On the helping side, the tax bill might cause a short term spurt in GDP, due to the continued financialization of the economy and the “wealth effects” trickling down. The U.S. can blow multiple little asset bubbles for a while. Think of a pot on the stove as it starts to boil.

One possible stimulus might be infrastructure, but the question is funding it. It appears that the Republicans are opting for private financialization here too. Ultimately the poorer people will get stuck with this bill also, either through increased future taxation to pay off special bonds, or tolls and user fees on roads and bridges.

Meanwhile in labor news, “full employment” may be easier to attain, no matter what happens — and may be rewarded at the ballot box — due to other reasons: because the baby boomers are permanently leaving the workforce while possible immigrants are frightened away by the increased U.S. racism.

Yet on the other hand, the tax bill could be a political mess for the Republicans. Why? Because in the past, Republican tax cuts (Reagan, Dubya) came at the bottom of a business cycle, so the fiscal stimulus gave a cyclic spurt and more jobs. Now the U.S. is near the top of the business cycle and so instead it might cause higher interest rates to prevent inflation, thus a stronger dollar as international finance pursues the yield, thus less exporting, more imports (priced higher at Walwart) due to the rising dollar. But not a lot more jobs.

Also it may not lead to more jobs because the supposed need for more business investment in the U.S. is not due to a dearth of available cash among investors. They’ve been sitting on piles of cash.

Further, any businesses returning from offshore may not lead to many more jobs because they are hoping to automate in their next incarnations, not to drive up labor wages.

On top of all of this, the actual tax cuts to households making between $40,000 and $100,000 in 2018 will average about $800 (according to the Joint Committee on Taxation). Which comes to $15 per week. Most taxpayers won’t even notice this. At the same time, another political downside for the GOP is the increase (10%?) in monthly healthcare premiums for the middle class that will be entailed by ending the Obamacare mandate. Households certainly will notice that!

So, the Republicans may need to refurbish the political rhetoric of their old supply-side snake oil. Republicans are not the brightest bulbs, and they will need to rely heavily upon the loud repetition of propaganda on Fox News.

Perhaps we will hear heavier blame placed upon the Fed.

For Treasury’s part, of course the total U.S. federal debt won’t be a problem until another currency in the world becomes a major reserve currency. (Which might have taken a long while, though Trump may have accelerated the process by showing that the U.S. future is dismal.) But taxing the wealthiest enough so that there is no annual deficit is still the smartest option at the top of a business cycle.

The GOP is now signaling that they will use the public’s fear of debt to argue for cuts to Medicare and Social Security. Most of the public have a very short attention span, but it is hard to imagine that they won’t notice this particular swindle. Maybe these GOP signals are only trial balloons to see how stupid the populace has become. I have no faith that the Democrats will suddenly be coherent, but this one seems like a slam dunk.

17

Fu Ko 12.11.17 at 6:16 pm

He put the story about the kid who wanted a bag lunch to prove someone at home loved him right after his argument for why we need to keep people (e.g., mothers) in the workforce since they have no dignified role at home.

I almost think Ryan is trolling us.

18

oldster 12.11.17 at 7:45 pm

Should we read your title with an elided “are”, i.e. “If taxes [are] the “thunder etc.””?

Or did you mean to write “If tax is the “thunder etc.””?

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