Paul 'Jobs, Jobs, Jobs' Ryan Should Heed Brownback’s Trickle-Down Failures

(AP/Carolyn Kaster)

House Speaker Paul Ryan of Wis., speaks during the National Association of Manufacturers (NAM) 2017 Manufacturing Summit in Washington, Tuesday, June 20, 2017.

After passing a bill that will gut the American health-care system, Washington, D.C.’s favorite conservative wonk-master, House Speaker Paul Ryan, is beginning to lay the groundwork for his “Better Way” tax plan, which he touts as a beacon of truly comprehensive reform—though the only certain detail in the plan is that it would dole out generous tax cuts to the top income and corporate rates. 

In a Tuesday speech at the National Association of Manufacturers’ annual summit—an event chock full of the business-owners and CEOs who will reap the tax-cut rewards—Ryan delivered a big speech about the need for tax reform that consisted of nothing more than the same tired trickle-down talking point that Republicans have clung to for 40 years.

“Once in a generation or so, there is an opportunity to do something transformational—something that will have a truly lasting impact long after we are gone. That moment is here and we are going to meet it,” Ryan pronounced. "Ladies and gentlemen, we are going to fix this nation’s tax code once and for all.”

“Why [cut tax rates]?" he asked. “Because this will create jobs. That is what this is all about: Jobs, jobs, jobs. Good, high-paying jobs.”

Perhaps the speaker missed the news out of Kansas a couple weeks ago, when the Republican-led state legislature rebelled against their governor (and Ryan’s former boss), Sam Brownback, and his disastrous 2012 tax cuts, overriding his veto of a tax plan that would undo the cuts. Brownback had eliminated the upper-income tax bracket, lowered rates, and exempted business-owners from paying income tax altogether. 

As he signed his 2012 tax cuts into law, Brownback made the same claim as Ryan, stating that his plan would “create tens of thousands of new jobs and help make Kansas the best place in America to start and grow a small business."

It didn’t.

Five years in, Kansas’s economy has lagged behind its neighboring states, failed to create a jobs boom, and led to a revenue shortfall that brought the state to the brink of fiscal catastrophe. Spending on schools, infrastructure, and social services was continually cut, even as Brownback tried to further ratchet down tax rates. Today, there’s only a tiny sect of Kansans who will tell you the Kansas tax cuts worked—and they’re the state legislature’s version of the Freedom Caucus.

Everyone else in the state knows the tax cuts most certainly did not drive economic growth, just as tax cuts have failed to create economic growth each time trickle-down experiments have been tried.

Yet, Ryan’s tax plan is taking the Brownback model national. That’s not because Ryan thinks that, finally, this will be the time that supply-side economics works. It’s because trotting out the continually disproven argument used to animate the Republican Party’s entire policy agenda—that tax cuts drive job growth—is the most powerful negotiating strategy for securing tax cuts for the rich. Despite all the evidence to the contrary, their trickle-down claims are still treated as legitimate economics.  

Analysis has shown that almost all—99.6 percent, to be exact—of the tax savings generated by Ryan’s tax cuts would go to the top 1 percent of households, while low- and middle-income Americans would get little. The cuts would also lead to an astounding dearth of federal revenue (about $3.1 trillion in the first decade, according to the Tax Policy Center). That in turn would give Republicans even more cover to cut federal spending down to the bone.

Ryan mouths the obligatory vague platitudes about closing special-interest loopholes and excessive deductions to cover the cost of cutting rates, but so far the only provisions he’s called out by name for elimination are the estate tax and the Alternative Minimum Tax—and doing away with either would almost exclusively benefit the wealthy.

Ryan’s tax plan is not some sort of genius innovation in conservative policymaking. It’s trickle-down economics, through and through.

It created a fiscal meltdown and a political backlash in Kansas. It would do the same in Washington. 

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

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