It is a victory for Republicans that the political conversation—when it’s not being hijacked by President Trump’s assorted outbursts and outrages—is focused on tax cuts. No matter how critical the coverage gets, the sheer amount of attention risks sending a message that taxes are the most important issue confronting the country.
This is entirely wrong, and it’s essential to challenge the whole premise of the debate. The U.S. does not need tax cuts now. Reducing government revenues at this moment will do far more harm than good. Conservatives are proving definitively that they don’t care in the least about deficits. And their claims that tax cuts will unleash some sort of economic miracle have been proved false again and again and again.
But there is an even bigger objection: The opportunity costs of this obsession are enormous because it keeps us from grappling with the problems we really do need to solve.
Ever since Trump’s election, discussion of the vast divides in our nation between prosperous regions and those battered by economic change have filled our newspapers, websites and airwaves. There is simply no way that shoveling out $2.6 trillion in business tax cuts in a largely undifferentiated fashion does anything to help places that are ailing.
On the contrary, this farrago of corporate goodies—along with the absurd repeal of the estate tax and various other benefits showered on the well-off—would only aggravate existing inequalities. And by depleting the government’s coffers, it would make it much harder to finance public initiatives in education, job training and other spheres to promote mobility for Americans who are lagging behind.
This, by the way, is why ending the deductibility of state and local taxes is an especially bad idea. This provision punishes states with more progressive tax structures that ask their best-off citizens to ease the difficulties of their less fortunate neighbors. Shifting the incentives against states willing to spend money to remedy social ills is the not-so-hidden agenda of the anti-tax obsessives who support killing this deduction. They are trying to disable government at all levels by making it harder for states to call on their most affluent citizens to pay a little more of the common load.