It’s no secret that the Republican tax plan is going to be a bad deal for the lower and middle classes. But what’s really weird about it is that it’s a bad deal for the moderately rich too — i.e. people earning between $150,000 and $300,000 a year.
It’s really unfortunate that the bill is probably going to turn on this little blip and not the fact that it does a great number of horrible things to the poor and the sick. But any sane person knows that Republicans are hyper-political animals who calculate cost and benefit more frequently than computers or marketing executives at tech companies. Their response to Roy Moore and Trump in 2016 is evidence of that; whatever benefits them as a party and wins them elections, regardless of the moral or international implications, is what they’re going to do.
What the tax plan does to the moderately rich — who are, surprise, a sizable portion of the Republican base — is what any Republican “on the fence” about the bill is the most worried about. Pushing that worry, then, is integral to the death of the bill. So naturally, I’ll spend the next following paragraphs pushing it.
I’m from New Jersey, and New Jersey is a mostly suburban, relatively wealthy state with criminally high taxes. The current version of the GOP tax plan will eliminate state and local tax deductions, despite the fact that a great deal of New Jerseyans (and New Yorkers and Californians and Bay Staters) rely quite heavily on them. To really put it into perspective: Suppose I live in New Jersey and I pay around 25k in taxes. Suppose my Alabamian counterpart, who makes the same amount as me, pays 12k in taxes. Such a disparity is logically inconsistent — people in New Jersey pay significantly higher taxes than people in Alabama, even though they make the same amount of money. Under the current tax code, I can deduct 25k from my federal tax, while my Alabamian counterpart can deduct 12k. Naturally, then, I’d want to keep state and local tax deductions in place because I want to get as much as back of my 25k as possible. I should get out what I put in, right?
We should be clear about who we’re really talking about here, because it’s a very specific portion of the population. Who pays the most taxes, and who benefits from getting those taxes back? Well, moderately rich people — people who are just rich enough to get saddled down with a high tax burden, but not rich enough to skirt around it, like many people (including our president) do, despite the fact that this civic responsibility dates back to our country’s very founding. These people are going to get, for lack of a better way of describing it, royally screwed over by the GOP tax bill. And the vast majority of these people live in states like New Jersey, California, New York and Connecticut.
Republican legislators from those states are worried about this bill, as they should be. They argue that it’s a geographical wealth distribution, taking money from New Jersey or Massachusetts or Connecticut and giving it to Alabama or Mississippi or Wisconsin (Paul Ryan’s home state, no surprise there). Despite that, a great deal of blue-state Republican legislators have signed on to the bill. Maybe it’s because they want to get something, anything, done this year, no matter how awful. Or maybe it’s because they think this provision is going to get hammered out eventually by the Senate (which is really unlikely, provided that blue states don’t have Republican senators), or committee or whatever. Or maybe they don’t give a damn about their constituents, constituents that likely voted them into office in the first place.
Make no mistake, then: This is not a bill for the wealthy. It’s a bill for the wealthy among the wealthy. The token rich. The top 0.1 percent. The Trumps, the Mnuchins and the Mercers of the universe. Not even your town’s resident rich person — the doctor or lawyer with a boat in his four-car garage — is going to benefit from this bill. It’s going to punish people in coastal states, and award the states that the bulk of the GOP represent.
It’s a bad, bad deal, and the only way it will die is if moderately rich people — your town’s resident rich person — knows that. He or she has the most to lose. So if you live in a blue, coastal state and are represented by a Republican member of congress, give them a call. The bill is going to turn on lawmakers like them.