In tax politics, unity is power

Four hundred years ago, Francis Bacon declared, “Knowledge is power.” Nobody should want to argue that point with Bacon, a great scientist. However, he was not a political scientist. Had he been in politics, he might have made another declaration: “Unity is power.” 

A case in point is the recent tax bill, the Tax Cuts and Jobs Act (TCJA). Despite a year’s worth of pounding from many sources, congressional Republicans stayed united. When TCJA passed the House on Dec. 19, it garnered the votes of 227 of 239 Republicans voting — 95 percent of them. The following day, it passed the Senate with the support of 100 percent of those Republicans voting.  

{mosads}If we recall one of the true cliches about legislative leadership — that it’s like herding cats — then we get a sense of the Republican achievement. For purposes of comparison, we might think back to 1993-94, when the Democrats held much larger majorities in both the House and Senate, yet couldn’t get their “ClintonCare” health-insurance bill even to the floor of either chamber.

Thus, in getting TCJA through, full credit must go to the legislative legerdemain of House Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) (the loyal-opposition Democrats, too, have shown impressive unity, even unanimity, but their numbers were, of course, smaller to begin with).

Yes, unity is a decisive concept, because bigger usually beats smaller. That’s why in military affairs, unity is a sacred concept; to let one’s forces be divided is to risk being, as generals put it, “defeated in detail.” 

Or as Ben Franklin said so mordantly of American patriots during the Revolution, “If we don’t hang together, we’ll all hang separately.” 

And we know that the words “a house divided against itself cannot stand” were uttered by that famous coalition-builder, Abraham Lincoln, borrowing from the Book of Mark. In any context, the guiding concept is the same: Stay united.  

If GOP lawmakers stayed united on their way to victory in the tax-cut fight, so did another key group — the business community. That was itself an achievement, because as a group, “business” is as diverse as any “community.” 

However, over the last few years, the reality that the U.S. had drifted into the untenable situation of having the highest corporate tax rate among developed nations had the effect of galvanizing business leaders. 

That is, it simply wasn’t sustainable for the U.S. to be so badly out of step in the ultra-competitive global economy, in which other countries were lowering their corporate rates and winning greater investment and jobs. As a result, even if businesses had often been divided in the past, the urgency of lowering the corporate tax rate proved to be a unifying force.   

In 2011, the Reforming America’s Taxes Equitably (RATE) Coalition, of which this author is a part, came into existence. RATE has consisted of large, medium and small businesses, all united around a straightforward goal: Get the corporate tax rate down to an internationally competitive level. In 2017, that goal was included in the TCJA legislation.  

Grover Norquist, founder and president of Americans for Tax Reform and a veteran of tax-cut politics since the 1970s, deserves no small measure of credit for this unity. Since his work on Ronald Reagan’s 1986 Tax Reform Act, he has been a champion of lower tax rates across the board.

That across-the-board approach has the advantage of intellectual clarity, based as it is on the “supply side” theories of Arthur Laffer and others, as well as obvious fairness. Still, in the swampy realm of tax politics, such clarity and fairness has often been in short supply.   

Yet, in defiance of the familiar miasma, on just about every Wednesday since 1993, Norquist has held a weekly meeting in D.C. for activists, centered on the idea of cutting taxes. Moreover, Norquist’s group has spun off similar meetings in some 40 states. 

One result of this patient seed-planting has been the flowering of a broadly shared national consciousness, at least on the right, about the ideal tax policy: lower rates across the board.  

Late last year, that shared consciousness helped to foster the political unity needed for congressional Republicans, joining the Trump administration, to defy the naysayers and to enact the TCJA, the boldest change to the tax code in three decades. 

Many believe that the most important provision of the bill was an across-the-board cut in the federal corporate tax rate; that rate was reduced by 14 percentage points, or one-third, from 35 percent to 21 percent.

We might note that in absolute and proportional terms, the cut was the largest ever in the 108-year history of the corporate income tax. Today, in fact, the corporate rate is the lowest it’s been since 1939. 

So, if Francis Bacon were alive today, surely he would appreciate this conversion of an abstract idea into tangible action; knowledge can be, indeed, a kind of power — political power. 

At the same time, Bacon might also appreciate the power of unity: the ability of like-minded lawmakers to rally together, turning that idea into concrete results.  

James P. Pinkerton served as a domestic policy aide in the White Houses of Presidents Ronald Reagan and George H.W. Bush. Since 2011, he has been the co-chair of the RATE Coalition.