The Republican tax bill, as David Brooks highlights well in his recent New York Times editorial, is the clearest elucidation yet of the current Republican vision for the future of the U.S. since George Bush’s tax cuts and Medicare Part D in 2001-2003. The current incarnation is very different: it firmly embraces the notion of the corporate state over that of the individual – wealthy or otherwise – and its closest comparison lies with Germany and Italy in the 1930s.
That last sentence should not be read as a reference to Hitler and social Nazism, though the Republican embrace of white identity politics has its own close comparisons to social Nazism. Rather, the linkage comes from the Republican desire to tie U.S. government interests with corporate interests, and to create a massive and radical new imbalance between corporate and individual tax rates.
At the most basic level, the Republican tax plan does two very new things: 1) it is the first Republican tax plan in over a generation to not lower the top individual tax rate and 2) it explicitly punishes wealthy individuals in blue states such as California, New York, and New Jersey. At the same time, it explicitly lowers corporate tax rates drastically from 35 percent to 20 percent.
So, net, net: under current law corporate tax rates and the highest individual tax bracket are quite similar (at least before all deductions): 35 percent vs. 40 percent. Under the new law, that would be 20 percent vs. 40 percent in most red states and, with key deductions gone, closer to 20 percent vs. 60 percent in the wealthiest blue states.
This change would create two new intentional imbalances: it would explicitly drain wealth from certain parts of the country because of their political views – which may be read as a violation of the First Amendment Right to free expression – and, second, it makes it clear policy that the U.S. government favors corporate rights over individual rights for the first time.
Combined with the recent changes to regulations around arbitration lawsuits, and the decline of union participation, it would both give U.S. corporations their firmest control over U.S. policy since the McKinley Presidency at the turn of the 20th century and put U.S. government and policy firmly behind that change.
Republicans believe this is necessary for the U.S. to once again become the most-friendly country to do business and to win the battle for corporate headquarters and profits that they believe will define the 21st century. But Americans must ask themselves: What will this cost society?