NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Friday, September 1st, 2017

Ohio’s Tim Ryan thinks the way for Democrats to win elections is to become Republican-lite

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.

A new report just out this week from the Insti­tute for Pol­i­cy Stud­ies offers fresh evi­dence that past cor­po­rate tax cuts boost­ed CEO pay — but not jobs.

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.

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One Comment

  1. We don’t want to adopt that strat­e­gy, but I believe our tent is big enough to include those that fol­low that belief.

    # by Mike Barer :: September 2nd, 2017 at 7:50 AM