GOP manhandles the blue states
At a moment when lots of Americans have lots of problems, Congress and President Trump are discouraging people from taking better care of each other. Republicans spent decades preaching the virtues of private charity and local governance. Then they went and passed a tax bill that undercuts both.
Last week, the nonprofits that fight hunger, homelessness, and other social ills were scrambling to get donors to write bigger checks before the end of 2017. Because fewer people will itemize deductions under the new tax law, they’ll have less of an incentive to give to charity in the future.
Meanwhile, homeowners in Massachusetts rushed to prepay their 2018 property taxes, because the new federal law, which took effect Monday, caps the federal deduction for state and local taxes. Over time, the change is a major blow to blue-state residents, and not just the ones in big houses in fancy towns. It’ll stiffen resistance to local property and state income taxes — an outcome that may suit House Speaker Paul Ryan and Senate majority leader Mitch McConnell just fine — and in doing so will dissuade states and communities from investing in their own futures.
The willingness of Massachusetts towns to tax themselves produced the country’s best public schools; the same drive toward self-improvement made the state a pioneer in near-universal health care. The Massachusetts political model has its flaws — nannyism and snob zoning, to name just two — but it represents a proven theory of how society flourishes: When the average citizen is well-educated and healthy, anything’s possible.
Should federal tax policy promote this approach? Of course it should, especially because Massachusetts taxpayers have already been kicking in far more to federal coffers than the state gets back.
Besides, the common good needs more attention, not less. The American economy is changing in ways that leave unskilled workers few prospects. Productivity is stagnant. Even with jobless rates at 17-year lows, wages have barely grown. Baby boomers without pensions are reaching retirement age with few savings. Meanwhile, life expectancy has slipped amid an uptick in suicides and drug overdoses — which some experts call “diseases of despair.”
This is the context in which Trump and GOP congressional leaders put forth the Tax Cuts and Jobs Act, a $1.5 trillion splurge whose biggest individual beneficiaries were already set for life.
The rationale for the law is that, when rich people owe less to the IRS, prosperity for everyone inevitably follows. Never mind that many economists have predicted, and executives have largely confirmed, that corporations will spend their tax-bill windfall on dividend payments and share buybacks rather than on higher wages or greater expenditures on research and development.
In a parallel universe, we’d respond to growing uncertainty in the economy by giving Americans greater incentives to donate to charity. Congress would push states and local communities to do more for their citizens. And when drawing up tax laws, legislative leaders might even push the beneficiaries to spread the wealth around.
“How about this for an idea: no corporation or company should get a tax cut [if it] has any employee on public assistance,” former Bush-Cheney political strategist Matthew Dowd, now an independent, proposed recently on Twitter. “If you don’t pay your employees a living wage, you shouldn’t get a tax cut.”
The notion that people with jobs shouldn’t need to go on food stamps isn’t terribly controversial. Yet Dowd’s comment sounds unrealistic, even hopelessly naive, under the leadership that gave us the new tax law.
To Ryan and McConnell, it’s a feature, not a bug, that this same law will make it harder for Massachusetts to be Massachusetts. If only they knew what the Bay State knows: Public policy demands a measure of public spirit. And society can’t thrive unless people tend to it.