It's amazing the stuff you can find in the NYT. Most of us learn at a fairly early age that the people who sit in Congress are politicians. They get there by appeasing powerful interest groups who give them the money and political support necessary to get and hold their seats. However, NYT columnist David Brooks seems to think that they get their seats as a result of their political philosophy.
In his column on the tax debate, titled "the clash of social visions," Brooks tell readers:
"The Republicans have a social vision. The Republican vision is that the corporate sector is more important to a healthy America than the professional and nonprofit sector. The Republican vision is that companies that thrive in the red states, like manufacturing and agriculture, are more important for the country than the industries that thrive in blue states, like finance, media, the academy and the movies."
Hmmm, so the Republicans have a vision that people (like Donald Trump) who get their income from pass-through corporations (or can devise a scheme that makes it look like they get their income from pass-through corporations) should pay taxes at a lower rate than people who get their income working as a lawyer, doctor, or other highly paid professional and don't cheat the I.R.S.?
And their social vision also tells Republicans that like kind transactions involving real estate (like those done by Donald Trump) should be exempt from the more general requirement that such transactions be subject to capital gains tax? (A like kind transaction involves exchanging two businesses or properties that have some general similarities.) Does the Republican social vision also tell them that heavily leveraged real estate deals (like those done by Donald Trump) should be exempt from the caps on the deductability of interest?
It would also be interesting to know how the Republican social vision implies that cancer victims should not be able to deduct massive medical bills from their income taxes. It's also not clear how ending the tax deduction for the interest on college loans advances the Republican social vision.
One item that Brooks apparently buys based on his own social vision, or perhaps religion, is that corporate tax cuts will lead to a huge surge in growth. He tells readers:
"The intellectual case for general corporate tax reform is strong. Countries across the world have been cutting corporate rates. The United States now has the highest corporate rates in the O.E.C.D. and the third-highest rates in the world. Cutting those rates would attract investment, unlock money trapped abroad and increase wages for many families. Economists vary widely in their estimates, but Larry Kotlikoff of Boston University estimates, on the high end, that a lower corporate tax rate could increase working-household income by roughly $3,500 annually."
Actually, many other researchers have examined this issue and found that corporate tax cuts have little impact on investment. Some of us are old enough to remember that the corporate tax rate was cut from 46 percent to 35 percent in 1986. The late 1980s were the weakest period for investment in the post-war era.
The idea that bringing back the money nominally held overseas will lead to a huge jump in wages is also laughable. We tried this in 2005 — try to find the jump in wages in the data. But hey, Brooks is dealing with social visions, he can't be bothered with things like data.
Anyhow, it is kind of cute to imagine that the people designing policy in Congress are moved by social visions. It's not the sort of thing most people would take seriously, but no expects serious thinking in the NYT's opinion pages.
Note: Typos corrected, thanks Robert Salzberg.