Caught between the demands of national Republicans and the well-being of his constituents, U.S. Rep. Tom McClintock tried in his Sacramento Bee op-ed, “If it’s going to hurt Californians, delay some of the tax plan” (Nov. 11, Forum), to thread the needle by supporting a historic tax giveaway to corporations, while backpedaling from proposals that would raise taxes on ordinary people.
The trouble is, paying for corporate tax cuts is the whole reason national Republicans have gone looking for new revenue in the pockets of middle-class Californians.
Since national Republicans are pushing these changes to pay for the $2 trillion in corporate giveaways McClintock supports, you’d think he’d have a pretty strong case for why that will help the economy. But the evidence shows the opposite.
Their plan starts by eliminating the ability to deduct state and local taxes (SALT) from our federal taxes. That’s an idea McClintock himself has said is “like being taxed twice.” With four in 10 taxpayers in my district claiming the SALT deduction, that’s a lot of folks who’d be double taxed.
Next, the plan eliminates a range of deductions that benefit working families. These include the deduction for medical expenses, a credit for hiring veterans, a deduction for teachers who buy classroom supplies, and the student loan interest deduction. It even eliminates deductions for victims of California’s wildfires and earthquakes.
Finally, thanks to rate changes over time, by 2024 a family of four making $59,000 would actually see a tax increase. By 2027, millions of middle-class Americans would be paying higher taxes than under current law.
Since national Republicans are pushing these changes to pay for the $2 trillion in corporate giveaways McClintock supports, you’d think he’d have a pretty strong case for why that will help the economy.
But the evidence shows the opposite. One study of the 92 companies that paid less than a 20 percent tax rate between 2008 and 2015 showed that more than half cut jobs, with the tax savings going to executive pay and stockholders instead of hiring and wages.
And when Kansas implemented a similar corporate tax cut in 2012, the state’s economic growth slowed and its tax revenue cratered, nearly shuttering its public schools and forcing deep cuts to everything from Medicaid to infrastructure. Kansas’ Republican legislature eventually rescinded the cuts to restore basic public services.
If the claims for corporate tax cuts don’t hold up, why have Washington Republicans made them their top priority? One answer came from New York Congressman Chris Collins, who admitted to reporters this week, “my donors are basically saying, ‘Get it done or don’t ever call me again.’”
It seems McClintock, a beneficiary of Koch Industries money in 2016, may be hearing the same thing.
Jessica Morse is running for Congress in California’s 4th District. She is a fifth-generation Northern Californian and a former national security strategist. Reach her at Morse4Congress.com.