History Suggests Democrats Unlikely To Repeal Unpopular Tax Bill If It Passes
Senate Republicans are in a rush to pass a very unpopular tax bill that would dramatically cut taxes for the rich and corporations.
There are many reasons why they want to pass this unpopular bill. It is what their donors want. Tax cuts are an article of faith among the modern GOP. They need a “win,” but one major reason that does not get enough attention is the past behavior of Democrats.
History has shown if Republicans push through tax cuts for the rich, or to advance corporate policy, Democrats are unlikely to ever undo most of them. This makes the temporary wane in support a long-term reward.
Consider the last time Republicans used the exact same reconciliation process to push through a massive deficit-increasing tax cut under President George W. Bush.
The second Bush tax cut, the Jobs and Growth Tax Relief Reconciliation Act of 2003, was approved on a near-party line vote with Vice President Dick Cheney casting the tie-breaking vote in the Senate. Democrats rallied against it at the time and for years after.
When the tax cuts were set to expire, did President Obama let them expire? No, even though Obama claimed the deficit was a massive problem the country needed to fix.
Did Obama remain committed to a pledge to end cuts for those making over $250,00? No.
Obama cut a deal with Republicans in 2010, when Democrats knew they were likely at the peak of their power, to temporarily extend all the tax cuts for two years. In 2012, after Democrats lost more power, they cut a deal to make most of the tax cuts permanent and only raise the rate for individuals with an income over $400,000.
The net result from the Bush tax cuts was that after the compromise the rich paid a lot less in taxes than they did in before. The estate tax is much lower than it was in 2001.
Another event worth comparing to the current effort to cut taxes for the rich is the 2003 law that created Medicare Part D. It was rightly criticized at the time as one of the most corrupt laws ever adopted.
The chief architect of the law, Rep. W.J.”Billy” Tauzin (R-LA ), made sure the law prohibited the government from saving money by being able to directly negotiate with the drug companies. As soon as Tauzin retired, he immediately became a high-priced lobbyist for Big Pharma.
Democrats rightly rallied against this provision at the time and campaigned against it for years afterwards. Yet, once Democrats gained full control of the federal government in 2009 with a filibuster-proof majority in the Senate, they actively refused to undo this provision. (Obama actually cut a deal with the same Billy Tauzin he campaigned against.)
Once big tax cuts for the rich or big benefits for corporations are adopted, Democrats rarely roll them back. Even policies Democrats actively campaign against for years are left in place or only partially repealed.
The bill will make corporate tax cuts permanent while cuts for individuals will expire in 2026. But Republican senators and their corporate donors do not have to worry about corporate tax cuts being repealed in three years if Democrats win big in 2018 or 2020.
Democrats have given Republicans and their backers ample reason to believe once these cuts become law most of them will remain, even after Democrats win back a majority in Congress.
That is how the donor class views this unpopular tax bill, and that makes all the difference.