Today, the Prospect's daily email inaugurates a new feature: our “On TAP” blog posts by two of our editors. Every Monday, Wednesday, and Friday, we’ll be including in our daily emails a new blog post, under the heading “Kuttner on TAP,” by Prospect Co-founder and Co-editor Bob Kuttner. Every Tuesday, Thursday, and the occasional Friday as well, we’ll include a new blog post, under the heading “Meyerson on TAP,” by Prospect Executive Editor Harold Meyerson (me).
To begin, then: This week the House is expected to vote on its own version of the Republicans' tax reform bill, while the GOP-controlled Senate Finance Committee continues its deliberations in the hope that it can find new and exciting ways to make our tax code even more pro-plutocratic. Once these bills reach the floor of their respective houses, there's no chance in hell Democrats will be allowed to offer amendments, but so long as the Senate bill lingers in committee, Democrats will still be able to introduce amendments, albeit with no chance of seeing them pass.
To date, congressional Democrats have focused more on opposing the Republican proposals than advancing their own. There's some logic to that, as the Republicans' brainstorms stay in the bills and, hence, in the news for some time—at least until the Republicans come up with something even more regressive—while the Democrats' proposals come and go in a flash. Nonetheless, by failing to make a serious case for a fairer tax code, the Democrats have largely blown an opportunity to put their stamp on an issue where their priorities are more in tune than the GOP's with those of the electorate.
The main Republican selling point for the central element of their proposal—a major reduction of the tax on corporations—is that by increasing the level of untaxed profits, corporations will choose to invest more, hire more, and pay their workers more. That there is not a shred of empirical evidence substantiating this claim—that, for instance, profits have soared since the recovery began in 2009 while wages have barely budged—is no deterrent to a party whose rise to power has been fueled by fake news. Moreover, as demonstrated by every poll in the past half-decade that's asked about such matters, a decisive majority of Americans understands that the rich are getting richer while the wages of most Americans are heaving and puffing to keep up with the cost of living.
This presents Democrats with an opportunity both to align themselves with public sentiment and outline a plausible vision for a more broadly shared prosperity. Why not introduce an amendment in the Senate Finance Committee that would hugely reduce the tax on corporations that divided the seats on their boards equally between representatives of their shareholders and representatives of their workers? The only real way to dethrone the doctrine of “maximizing shareholder value”—which virtually all our corporations have taken to mean “at the expense of investment and worker compensation”—is to diminish the near complete control that major shareholders wield over corporate managers. Giving workers an equal say over the conduct of corporations is one way to begin that process. A version of this arrangement is required by law in Germany, and it's no accident that Germany has done a far better job than we have in maintaining a large and vibrant middle class.
So, how about reducing to, say, 5 percent the tax on corporations that go this route and raising to a nominal 40 percent the tax on corporations that don't? Up to now, Democrats have largely kept their critiques of our pervasive economic inequality out of their discussions of corporate tax reform. That's a strategy that has yielded them precisely nothing. With the window on their ability to present and publicize amendments to the tax reform bill still open for a few more days, there's time yet for one big anti-plutocratic push.
