Fact-check: McSally on the Tax Bill
Nov 5, 2017
On the same day House Republicans unveiled their new tax cut proposal, Martha McSally indicated her enthusiastic support, both in an official statement and a flurry of tweets.
How enthusiastic? Unlike with the health care bill, she managed to refrain from using f-bombs. But it’s clear she’s all in.
That’s not a surprise. McSally is hugely dependent for her campaign financing on House Speaker Paul Ryan and his political ally, New York hedge fund billionaire Paul Singer; it was a given they’d have her support on this, their top legislative priority.
Why are they so eager? It’s no mystery; the bill was written to benefit the donor class. Here’s a partial list of the bill’s provisions which impact mainly the wealthy and corporations, and the amount each would cost the Treasury over the next decade:
- Corporate tax cuts, $847 billion
- Eliminating the alternative minimum tax, $696 billion
- Eliminating the estate tax, $172 billion
- Preserving the carried interest loophole, $16 billion
- Slashing the rate for “pass-through” businesses, $448 billion
House Republicans couldn’t agree on how to make up for all that lost revenue, and decided to borrow the money instead, adding 1.5 trillion to the deficit.
McSally didn’t find that fact troubling enough to even mention in her public statement. Unfortunately, much of what did make it into the statement is either outright false or highly misleading:
- She claims that the U.S. corporate tax rate is the “highest in the industrialized world.” This is misleading: as Politifact points out, “official tax rates are one thing, while the tax rates corporations actually pay can be substantially less.” NPR has more details here.
- She implies that the bill is mainly directed toward low- and middle-income families with phrases like “hard-working Americans,” “hard-earned dollars” and “struggling families.” In fact, as the Chicago Tribune explains, “The tax plan’s primary beneficiaries would be wealthier Americans.”
- She claims that passage of the bill will mean that “more jobs stay here,” vs. being offshored. But tax experts point out that the bill as written “would actually incentivize U.S. companies to move their operations overseas and to shift profits to tax havens.”
- She claims that business owners will use their tax savings to hire workers and increase wages, putting her faith in “trickle-down” economics. But as Josh Bivens of the Economic Policy Institute shows, there is no direct link between tax cuts and wage increases, and in fact the opposite may be true: “Since World War II, productivity and wage growth in the U.S. economy were actually significantly faster in periods with higher corporate tax rates.”
- She has the gall to suggest that the bill will help families send their children to college, in spite of the fact that it eliminates tax deductions for tuition and student loan interest, imposes new taxes on scholarships and college endowments, and would reportedly add $65 billion to the cost of higher education over the next ten years.
- She cites fictional examples of the (relatively paltry) benefits to households earning less than $60,000, but leaves out the fact that these would be temporary, while the enormous corporate tax cuts that are the bill’s centerpiece would be permanent.
And in fact, as is often the case with McSally, it’s more important to pay attention to what she doesn’t say than what she does. There are several provisions in the bill which would seem to violate McSally’s own professed principles, yet she makes no mention of that in her statement:
- Earlier this year, McSally partnered with Democratic Rep. Kyrsten Sinema to sponsor a bill protecting the tax deduction for medical expenses; the tax bill she supports would eliminate that deduction entirely.
- McSally opposes abortion except in cases of rape, incest, or to protect the life of the mother. You might reasonably expect her to be in favor of policies that support families who adopt. But the tax bill she supports would eliminate the Adoption Tax Credit.
- McSally’s mother was a teacher, and she has claimed to be “passionate” about education. But the tax bill she supports would eliminate the break teachers get to help them purchase classroom supplies.
- McSally is a veteran, having retired from the Air Force in 2010. She frequently touts her efforts to help veterans find work. But the tax bill she supports would repeal the Work Opportunity Tax Credit, which incentivizes employers to hire veterans.
These particular measures would be so harmful and unpopular, you have to wonder if they were only included to give swing district representatives like McSally the chance to play the hero, and rise up to oppose them. If that were the case, you’d expect her to be calling them out. Instead: silence.
But the most glaring omission in McSally’s statement is any explanation as to HOW she can justify borrowing $1.5 trillion to give her rich donors massive tax breaks, at the same time we’re being told we can’t afford to fund badly needed infrastructure repairs, the Children’s Health Insurance Program, or solutions to the opioid crisis. Given how badly tax cuts for the wealthy poll (even conservative Republicans are opposed!), it’s unlikely her explanation would satisfy anyone but her wealthiest donors.