Envy is as envy does
by Tom Sullivan
The people who decry government picking winners and losers just passed a massive tax restructuring aimed at favoring “certain taxpayers and activities while disfavoring others — and for no discernible policy rationale.” Thirteen tax experts conclude that in a document titled “The Games They Will Play: An Update on the Conference Committee Tax Bill.”
That is, assuming “to the victor go the spoils” doesn’t count as policy.
Thomas Edsall comments on the report in detail at the New York Times. Edsall’s piece, writes Josh Marshall, captures “the mix of cynicism, greed, and sloppiness that created this bill.” Not to mention the self-dealing of the legislators who stand to benefit “bigly” from it. Edsall concludes:
All of this raises a basic question. How could nearly every Republican representative — and all 52 Republican senators — support the tax bill? The best answer may be the most cynical: because it benefits key leaders, their friends, their heirs and their donors.
But a survey at the Times of reactions to the tax plan from the left and the right yields this quote from James Piereson of the conservative American Greatness:
“To survive in a competitive universe, blue state governors and legislatures may have little choice but to reduce taxes and pare back public services and public employment — in other words, to abandon the blue state model.”
Piereson follows up with a jeremiad against public employee unions and how many members they still retain, concentrated in blue-ish states. The caps on state and local tax deductions, as well as other changes, he believes, “will increase the pressure on high-tax states to reduce taxes and rein in spending” and perhaps “reorder the political dynamic in blue states” where lie all those unions.
It seems pretty clear who Piereson believes should lose in the tax restructuring. He joins the Heritage Foundation’s Stephen Moore, who gloated to Business Insider, the tax bill would be “death to Democrats,” arguing unintelligibly that any tax increases the bill inflicts on blue states are the fault of liberals:
“Blue staters tend to send liberal politicians to office, who then vote for bigger federal spending — even though a greater share of the money goes to the red states.”
Piereson concludes, “As blue state leaders adjust their policies, their states will gradually become more competitive with their peers in the federal system.” Which is another way of saying, in a race to the bottom they will join red states on the lower tier of productivity. Rather than build up red states using a blue-state model, he’d rather see blue states cut down to red-state size.
For all their by-you-own-bootstraps zeal, red states lag blue ones in labor force participation. Robin Brooks, managing director and chief economist at the Institute for International Finance told CBS weeks ago:
“When the financial crisis hit you had a ton of people basically exit the labor force,” Brooks said. And while some of them have returned, they haven’t returned equally. “For blue states, people are getting crowded back into the labor force, but it’s not happening for red states,” he said.
“Since 2014, we’ve had a very strong labor market, the monthly pace of jobs created has been running between 160,000 and 200,000, and it’s just not working for red states,” he added. The labor participation rates in those two sets of states have diverged in recent years: growing in blue states and falling in red. And that pattern has continued since the presidential election. “The robust economic picture at a national level is therefore not healing the red versus blue state divide,” IIF wrote.
Red states especially are suffering from a reliance on “brick-and-mortar industries like retail and manufacturing,” especially for industries in decline. Contrarily, blue states “have an above-average reliance on high-tech and medical jobs, which are growing faster than average.” Austerity policies put in place in red states such as Kansas have slowed their recoveries.
To repeat what Michael Tomasky observed, blue America:
… produces the vast majority of our innovators and thinkers and scientists and creative people. This is the America that creates most of the nation’s wealth. Hillary Clinton may have won only 15 percent of the country’s 3,100-odd counties, but the 472 counties she did win account for 64 percent of GDP. This is the America that invents and designs and engineers; the America where there already really is so much winning.
The Washington Post’s Jim Tankersley observed in November 2016 it is “unprecedented, in the era of modern economic statistics” for a losing presidential candidate to have represented so large a portion of the country’s economic base.
Yet attacking that economic base in the name of expanding it is just what some Republicans admit they are doing, and for partisan reasons rather than economic ones. Conservatives like to argue that raising taxes for public purposes is about envy. So, it seems, is lowering them.
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