No Room for "Buffetnomics" in the GOP

By Megan Barth —— Bio and Archives October 16, 2017

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Make no mistake about it: if Congress, particularly the United States Senate, fails to send a tax bill to the president's desk, it will imperil the congressional majority, do lasting damage to the Republican Party, and potentially threaten the American economy. The clock is ticking. Donald Trump made tax reform a cornerstone of his presidential campaign, but he was not the first Republican to do so. Since Ronald Reagan enacted the largest tax cut in American history and reinvigorated the American economy, every GOP nominee for president has promised to provide tax relief. In 2000, George W. Bush promised tax cuts and in 2008, GOP nominee John McCain said that tax cuts were the center of his economic plan. McCain, according to the New York Times, "outlined a long list of tax cuts he favored in the speech, which was delivered on the deadline for filing taxes. He called once again for making the Bush tax cuts, which he voted against, permanent, and for cutting corporate taxes, phasing out the alternative minimum taxand doubling the value of exemptions for each dependent to $7,000 from $3,500. He also proposed giving people the option of using a simpler, shorter tax form."

For voters who put their faith in the Republican Party, this is not a radical idea. In fact, it is a primary reason why people call themselves Republicans. Yet, there appears to be members of the House and Senate who publicly embrace tax cuts but are privately prepared to undercut them. In the House, Speaker Paul Ryan (R-Wis.) has put his colleagues on notice that he will cancel Christmas break should a tax cut plan not be passed by mid-December. But why should it be necessary to even make such a threat? Some of the reason might be congressional inertia, but the actions of his own members might not be helping the cause either. Rep. Jeff Fortenberry (R-NE) is a classic example of Washington doublespeak. Mr. Fortenberry was one of the few members of Congress to oppose extending the Bush tax cuts in 2010. Failure to extend the law would have imposed another massive tax increase on working families. Perhaps it is a coincidence that Mr. Fortenberry represents billionaire Warren Buffett in Congress, but at the same time, he does not seem to mind being identified with the billionaire's efforts to fight tax relief proposals. Fortenberry, like Buffett, is critical of efforts to end the "Death Tax," and has admitted that he agrees with Buffett on tax cuts. Buffett has denounced the so-called "carried interest" provisions of the tax code, which allow partnership members to pay capital gains taxes rather than income taxes. Elimination of the provision could nearly double the tax partnership members have to pay. Americans for Tax Reform has warned the GOP it should not play footsie with the tax hikers. Rather than supporting proposals that lead to higher capital gains tax rates, they suggest it would be better to look to lower rates.

Yet again, some Republicans are willing to allow the "tax cut" bill to actually raise taxes on some Americans. One member of the House tax-writing committee, Rep. Tom Reed (R-NY), said the bill should actually have some "pay a little more." Then, of course, there is the U.S. Senate, where one Republican Senator can cause havoc, potentially torpedoing the legislation. The beltway media is doing its best to encourage Sen. McCain to play "maverick" just as he did on Obamacare repeal. The grassroots of the Republican Party is already frustrated and disgusted by the establishment of the party. They feel like they have been lied to on key campaign promises like Obamacare repeal. Failure to enact tax cuts would be a betrayal that would permanently damage the party and its members. These GOP members who are contemplating raising taxes are playing with fire. Failure to act in a way that pleases the base will ensure they are the ones who get burned.