How the Republican Tax Plan Sets Out to Annoy Coastal Elites - OZY | A Modern Media Company

How the Republican Tax Plan Sets Out to Annoy Coastal Elites

How the Republican Tax Plan Sets Out to Annoy Coastal Elites

By Karol Markowicz


Because your tax bill could come down.

By Karol Markowicz

Paul Ryan is threatening to cancel Christmas. That’s what emails from his fundraising committee say, anyway. They quote Ryan talking to reporters in early October: “Half this country is living paycheck to paycheck, and if that means we’ve gotta stay here till Christmas to give them the relief that they deserve, then, tough, we will do that. Because this has got to get done, because people are hurting in this country.” Few doubt Ryan’s sincere commitment to tax reform, a cause he has taken up throughout much of his career, but this bill has taken on an oversize significance in the psyche of Ryan, his party and their voters.

Congress has passed no major legislation since January, when Donald Trump assumed the presidency with his party holding both the House and the Senate. It should be a cushy position. Instead, it’s been a public display of GOP dysfunction. Years of Republican candidates running for office promising to overturn Obamacare hasn’t resulted in actually overturning Obamacare, and the one thing Republicans need more than anything right now is a win.

The question is: Can this bill, or any significant bill, make it out of this Republican Congress?

They’re trying to get there by selling the complex, compromise-laden bill as a boon to the middle class. Ryan’s press secretary, AshLee Strong, pointed out on Twitter that a family of four earning the national median income of $59,000 will receive a $1,182 tax cut under the bill. In September, Emily Singer, a senior writer at Mic, mocked the idea of a tax cut in that $1,000 range. She tweeted: “Saving $1,000 a year on taxes is nothing. Less than $100 a month.” The pushback was swift, with a parade of responses from people describing what $100 a month could mean for them — extra food, less debt, a utility bill, building up a nonexistent emergency fund.

Singer’s tweet illustrated the ongoing divide between “coastal elites” and “real America,” the new terminology for “blue states” and “red states.” There are a few parts of the plan that seem designed to annoy those elites.


For example, the Republican tax bill slashes the cap on the mortgage interest deduction from a $1 million mortgage to $500,000 on new loans. Blue states will likely be hardest hit by this. According to Zillow, the median price of homes on the market in Iowa right now is $169,000, $154,900 in Ohio and $169,900 in Missouri. In New Jersey, meanwhile, it’s $299,000 and rising. In California, the median home price right now is $499,950. It’s not a coincidence that the cap was set at $500,000.

The details of the plan, called the Tax Cuts and Jobs Act, seem almost beside the point. News of any major change, whether to 401(k) retirement plans (the current iteration of the plan does not make any of the rumored changes to the contribution cap) or to state and local tax deductions (currently set to be reduced) make a ripple in the news, but overall the question is: Can this bill, or any significant bill, make it out of this Republican Congress?

Whether the bill passes matters a lot to Democrats too. What they’ve lacked in recent electoral successes they’ve made up for with legislative ones. They would love to go into 2018 saying that they held Trump’s major legislative hopes at bay. Their argument, though, has to get broader than “this bill increases the deficit.” The deficit isn’t a real thing to most people in the same way cash in their pockets from a tax cut will be. Democratic senators such as Kamala Harris of California, Bob Casey of Pennsylvania and Jeff Merkley of Oregon resorted to what The Washington Post labeled a “Four Pinocchios” falsehood — all tweeting the same incorrect statistic that families earning under $86,000 would see an average tax increase of $794. They need something like that to be true, as a deficit message is much harder to sell.

Can Republicans get this plan through? They desperately need it to show that they can work together and sometimes even win. On the campaign trail, Trump said if he were elected, Americans would win so much that we would get tired of winning. Congressional Republicans so far just seem tired of losing. They may even be willing to sacrifice Christmas to get a W in their column.

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