News & Politics

Paul Krugman: Are Republicans Committing Political Suicide?

The GOP tax plan is horrible policy and even worse optics.

Photo Credit: YouTube/Bloomberg

It's difficult to overstate just how much the public reviles the latest tax bill passed by House Republicans. A new Quinnipiac poll finds that Americans disapprove of the legislation by a 2-1 margin, and the New York Times' Paul Krugman suspects that ratio would be even more lopsided if they understood just how badly they were being fleeced. Hell, even the people who stand to gain the most seem less than enthused.

In his Friday column, Krugman draws attention to a recent summit former Goldman Sachs executive and current director of the National Economic Council Gary Cohn held with some of the country's leading CEOs. Cohn asked each if they planned to reinvest the money they save from their tax breaks in more jobs and higher wages. Only a small handful raised their hands, and Cohn demanded to know why.

"The answer is that C.E.O.s, living in the real world of business, not the imaginary world of right-wing ideologues, know that tax rates aren’t that important a factor in investment decisions," Krugman writes." So they realize that even a huge tax cut wouldn’t lead to much more spending.

The official Trump administration line is that the huge cuts extended to multinational corporations and the country's richest 1 percent will trickle down to the masses. It's all bunk, and not especially fresh bunk at that. Both the Reagan and George W. Bush administrations provided definitive evidence that these cuts will never pay for themselves, as Republicans insist. 

"Most serious economic analyses agree with those C.E.O.s who disappointed Gary Cohn: Corporate tax cuts wouldn’t actually do much to raise investment," Krugman continues. "They would, however, explode the budget deficit."

If this weren't enough, the bill would also throw as many as 13 million people off their health coverage through a repeal of the individual mandate, which requires that taxpayers purchase health insurance to help subsidize the Affordable Care Act. This, in turn, would drive up premiums, creating an "additional, hidden indirect tax on the middle class." 

Throw in the huge cuts to programs like Medicare and Medicaid that the legislation will invariably trigger, and it's safe to call the Trump tax plan an unmitigated disaster that will harm an entire generation of Americans.

"We’re talking about government of the people, not by the people, but by wealthy donors, for wealthy donors," Krugman concludes. "Everyone else hates this plan — and they should."

Read Paul Krugman's column at the New York Times.

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Jacob Sugarman is the acting managing editor at Truthdig.