Only someone inhabiting a bubble could possibly believe that the way for Democrats to win in 2018 is by embracing the agenda of the United States Chamber of Commerce. But that’s exactly what Tim Ryan of Ohio wants to do.
Democratic Rep. Tim Ryan is going against party leaders and calling for a business friendly agenda ahead of the 2018-midterm elections.
“To be competitive globally, we have to reduce the corporate tax rate,” Ryan told The Hill in an interview from his Youngstown, Ohio, district office. “We’re just not competitive globally because of that.”
Ryan, a fast-rising Democrat from industrial Ohio, is challenging Democrats to take a different approach to big business and work with corporate America to create jobs.
“We can’t just be the party of redistribution of wealth; we need to be the party of the creation of wealth in communities all over the country, not to just Silicon Valley, not just Wall Street, but all over.”
What a pile of nonsense.
First of all, Ryan is wrong that our corporate tax rate needs to be reduced.
The tax code could certainly be made fairer by eliminating exemptions not in the public interest, but slashing tax rates as he and Republicans want to do would result in harm to essential federal public services and prevent us from addressing our infrastructure deficit, which is reaching massive proportions.
Research has shown that the effective tax rate that corporations pay is not that different from what foreign companies pay. In other words, the notion that we aren’t competitive globally is hogwash. Business trade groups just want everybody to believe that so they can get their self-serving agenda of tax cuts through.
In 2014, the respected Congressional Research Service published a paper on this very subject (PDF). Wrote Jane G. Gravelle, Senior Specialist in Economic Policy:
Is the U.S. tax rate higher than the rest of the world, and what does that difference imply for tax policy? The answer depends, in part, on which tax rates are being compared. Although the U.S. statutory tax rate is higher, the average effective rate is about the same, and the marginal rate on new investment is only slightly higher.
Writing for Forbes, Martin Sullivan compared other research on corporate tax rates to that of the CRS, including the Business Roundtable, which favors tax cuts.
His bottom line? “The conclusion reached by the CRS report is more accurate than that of the Business Roundtable. On average, the foreign effective tax rate is not much lower than the U.S. domestic tax rate.”
The vaunted Economic Policy Institute reinforced these findings earlier this year when it published a report declaring that cutting corporate tax rates will not create jobs or boost incomes for the vast majority of American families.
Second, Ryan is wrong that Democrats can win in 2018 by co-opting the Republican Party’s agenda for the country.
Republicans already control the federal government; to win Congress, Democrats will need to present a compelling alternative plan for the country based on the logic of progressive values — a plan that excites the base and intrigues biconceptual voters who are weary or fed up with Trump, Paul Ryan, and Mitch McConnell.
The number one rule in politics is don’t alienate your base. But that is exactly what Ryan wants to do. The thought of Democratic candidates across the country campaigning on a platform of corporate tax cuts is simply grotesque.
The millions of voters energized by Bernie Sanders’ revolutionary presidential campaign last year are not going to turn out to support candidates who would be lapdogs for the U.S. Chamber of Commerce if elected.
Republicans are already for tax cuts for big corporations and the wealthy. If that’s what Democrats run on, then voters will rightly perceive there is no difference between the parties, and congressional Republicans will be returned to power for another two years. To put it another way, Democrats cannot beat Republicans by becoming the Republican Lite Party — no matter how damaged the Republican brand may be — because biconceptuals will always gravitate to the real thing.
Authenticity matters in politics. Trust matters.
To win the trust of voters, Democrats need to offer a platform that is for the people, not for the cheaters who want to rig the system for their own benefit. A platform that emphasizes ideas for building a more inclusive economy.
Tim Ryan doesn’t sound interested in building a more inclusive economy. In the span of one interview, he managed to contradict himself, first saying that Democrats need to be the party of wealth creation, not wealth redistribution (which is the language of the other side) and then immediately turning around and endorsing a policy of “wealth redistribution” from coastal states to states like his:
Though Ryan says he’s confident Democrats can take back the House in 2018, he insists a pro-business message will be key.
“If we could figure out the big economic question, which really is how do we get wealth out of the coasts and into the industrial Midwest and start creating real jobs by the hundreds, if not by the thousands, in places like I represent that’s a game changer for me.”
Wrong again. The big economic question is how do we build a more inclusive economy that provides broad prosperity for our families and opportunities for all. (Notice how I reframed by using language that evokes progressive ideas!)
Pitting regions of the country against each other and exploiting economically impoverished communities to fuel a culture war is how the Republicans roll.
Corporate tax cuts are not the recipe for a more inclusive economy. We know from experience that good jobs don’t get created by handing out tax cuts like candy.
Tax breaks did not spur job creation
- America’s 92 most consistently profitable tax-dodging firms registered median job growth of negative 1 percent between 2008 and 2016. The job growth rate over those same years among U.S. private sector firms as a whole: 6 percent.
- More than half of the 92 tax-avoiders, 48 firms in all, eliminated jobs between 2008 and 2016, downsizing by a combined total of 483,000 positions.
Tim Ryan — whose name is so similar to Tim Eyman that I’ve had to check to make sure I’m not typing Eyman’s name instead out of habit — is apparently ignorant of the research I’ve cited in this post. He’s not only drunk the U.S. Chamber’s Kool-Aid, he’s become a salesman for it. It’s evident from reading this interview he has completely bought into the ideas of the other side. That’s very unfortunate.
If Democratic leaders want to win in 2018, they must recruit and support candidates who will proudly and happily articulate a progressive message of economic inclusion, not follow Ohio’s Tim Ryan down the road to electoral doom.