Cutting Taxes without a Tax Cut

As Jason pointed out recently, eliminating Obamacare would provide a huge tax cut to the top 0.1% -- about $154,000 on average. Republicans also have plans to cut taxes beyond that through a massive cut to the corporate rate, but even that won't be enough for their big money donors. So how do Ryan, Trump, and the rest of the GOP continue to cut taxes when such policies are incredibly unpopular?

Just as eliminating Obamacare would provide a massive tax cut, privatization of our social safety net (Medicare, Medicaid, Social Security, and disability assistance) would provide billions in tax cuts to individuals and businesses.

For 99% of their employees, corporations pay 7.65% taxes for their share of FICA. The top 1% of workers have incomes that exceed $118k, and therefore employers will only pay 1.45% on the portion of income for workers exceeding that threshold (this is a mirror of what workers pay).

The average Fortune 500 company employs 52,900 workers. The bottom 99% of earners would be 52,371 workers. And the average earnings per worker is $48,098.63. So, ignoring the top end (the executives), we can see that a typical large company wold save $192.7 million if Paul Ryan is able to eliminate FICA. Add it up and you hit $100 billion per year just to the Fortune 500 companies. Now that's a tax cut.

Rope-A-Dope on Obamacare?

More from TPM on "Repeal and Replace":

McCaskill challenged Trump and Republicans "to be honest" and actually come up with a plan rather than just ragging on Obamacare.
"Let's see how that would work for the millions of people who have certainty and security right now," she said.

Democrats admit that Obamacare needs some fixing, but they are dubious Republicans can just do it themselves.

"I think they should fix Obamacare and call it a repeal and replace," said Sen. Brian Schatz (D-HI).

"That is both the best public policy and the best politics for them. If they actually repeal the thing, people are going to suffer and they will suffer electorally."

Republicans are balancing conflicting pressures. On the one hand, they have promised their constituents for nearly seven years that they would repeal and replace this law. They have little wiggle room to escape that now. They've gone through the motions to pass legislation repealing it dozens of times, but the president's veto was a stop gap.

I don't know if this is the best strategy, but is another one available to the Democrats? The problem here is, it depends on both shame and the fear of the response from voters. The Republicans have no shame, and enough may be in really safe seats or be backstopped by the prospect of cushy think tank or lobbyist jobs if they succeed in gutting Obamacare or do lose. The potential gain for Republican backers if they get Obamacare repealed is likely massive in comparison to having to promise a "safety net" to Republicans taking the leap on their behalf.

In other news:

Republicans, according to Politico, plan to roll back DAPA, an Obama administration order that gave the parents of DREAMers legal status to stay in the U.S. without fear of deportation. Republicans also want to reverse Obama's fiduciary rule, which was designed to eliminate conflicts of interests for financial advisers who were balancing corporate clients and individual investors. The other rule Republicans want to eliminate is an overtime rule that requires companies pay overtime to employees making $47,000 or less a year, Politico reported.

Republicans are also prioritizing tax cuts, according to the Politico piece. While they will use the procedural process known as budget reconciliation to repeal and replace Obamacare as soon as January, they are also considering using another budget reconciliation process for the 2018 budget to push through tax cuts.

Obviously, Republicans want to screw immigrants. But look at the other items they're trying to get through. Overtime? Easing rules on banks? Tax cuts on the wealthy? This should be obvious to anyone who has been paying attention at all, but for the media to keep saying the it's the DEMOCRATS who can't appeal to the working class?

Yesterday, I published quite the stemwinder disagreeing with Ed at Gin and Tacos. Today, I agree 100% with this:

Given that reality, the Democrats' failure was in not offering a scapegoat. Maybe it's time to dust off the Joe Hill / Mother Jones / Eugene Debs playbook. If scapegoating is the only thing that wins these people over, then the best strategy is to point them in the right direction again and remind them that Capital is the enemy of Labor. End the worship of and fixation with Job Creators and the idea that the boss is your buddy and your role in the economy is a matter of personal responsibility, fully within one's own control.

Is that going to work? Doubtful. Racism is an easier, more effective play. Anything that requires people to think is going to lose out to anything that plays directly into their basest prejudices. I don't know how you beat the path of least resistance. The older I get, the less I believe that is possible.

It's not that the Democrats don't have a message that can appeal to the "white working class." It's that their message is inherently not as strong as racism, and if the Democrats want their votes, they need to push their economic message at least twice as hard as the Republicans push their racist one, which slides down as smoothly as butter.

UPDATE: Adam Johnson at FAIR has more on "identity politics" and appealing to the "white working class voter."