Tax reform’s opponents are demonstrating a very subtle sense of humor these days as the reform’s popularity continues to rise. In a recent interview explaining his own position, Indiana Senator Joe Donnelly (D-IN) observed, “We’ll have a thousand dollars out there [referring to bonuses due to tax reform]. And you’ll get that. And in return … we’re going to send your children and grandchildren the bill for that.”
Now, we know tax reform’s opponents are getting nervous about tax reform’s growing popularity. But such a statement coming from a thoughtful individual gives rise to a reaction along the lines of: You’re kidding, right?
To be sure, opponents have a tough task ahead. The mainstream media and their congressional allies had managed to attack tax reform for months prior to passage, even to the point of misleading many middle-class families to believing they would get a tax hike, and yet tax reform’s intrinsic logic and momentum could not be stopped. Now that tax reform’s benefits are beginning to flow, first in the form of bonuses and higher wages and other forms of compensation to which Sen. Donnelly referred, and then in the form of a substantially stronger economy going forward, tax reform’s opponents are rightfully getting a little nervous.
What to say? What to say? So some, like Sen. Donnelly, decide to harp on the deficit angle. To be sure, tax reform’s growth effects and their associated revenue flows will take time to build, and so even as the long-run budget effects are minimal, tax reform will push up the current year budget deficit. Let’s check the numbers.
The Joint Committee on Taxation estimated tax reform would increase the 2018 budget by about $136 billion. This means the budget deficit for 2018 absent tax reform would have been about $737 billion. So, if Senator Donnelly and others are worrying about the deficit effects of the tax bill, shouldn’t they be about six times more worried about the excessive spending giving rise to such a huge pre-tax reform deficit?
Where’s the outrage and worry over deficits absent tax reform? Where was the hand wringing when they voted for more spending earlier this year? Where are their expressions of concern over the drivers of rising deficits – the entitlement programs – and where is their worry over the fiscal health of the entitlement programs themselves as Social Security and Medicare are confidently predicted to hit a fiscal wall in just a few years?
Given their conflicted position on the deficit, if the deficit angle is the last refuge justifying tax reform opposition, then probably the best tactic is for those who opposed tax reform to stay quiet and hope voters don’t remember who did everything they could to stop tax reform, more jobs, higher wages, and a more prosperous future.