Tag: Simplicity

Back during President Donald Trump’s first administration, Wisconsin Republican Sen. Ron Johnson was known as Trump’s most reliable ally in the U.S. Senate. He led investigations into Hunter Biden, Hillary Clinton and alleged irregularities in the 2020 election that Trump lost. A proponent of conspiracy theories about COVID-19 vaccines and climate science, Johnson is not one of those Republicans who had to overcome principle to get in line behind Trump. 

He is completely at ease with the new administration — including the pardons of the Jan. 6 rioters who stormed the Capitol, battered police officers and sought to hang then-Vice President Mike Pence. The blanket pardon for the rioters, including those convicted of violent crimes, was “maybe a little more sweeping than I wanted to see,” he averred during a Politico breakfast this week. But, overall, Johnson said, the Jan. 6 defendants were victims of a “grotesque miscarriage of justice.” So Trump was right to pardon them.

If ever Johnson struggles to go along with Trump’s more out-there ideas, like slapping huge tariffs on imports that could devastate Wisconsin businesses and farms, he just figures he must not truly, deeply understand their wisdom. 

“When I don’t necessarily agree with him, I always ask myself, what am I not seeing here?” he told Politico’s Zach Warmbrodt. Like any good enabler, Johnson figures Trump must have some extra-tricky reason for doing harm that actually makes what he’s doing good. 

That kind of thinking will come in handy during the next four years. It could prove particularly useful to Trump as he tries to hold together supporters drawn to his promises to lift up the working class — the “forgotten men and women of America” — and tech billionaires including Elon Musk who want to liquidate the safety net, drive down wages and establish a permanent American oligarchy.

Johnson embraces white grievance and the racist, right-wing populist “replacement theory”— suggesting Democrats want more immigrants to cross the southern border and come to the U.S. to “change the makeup of the electorate” — but he is also fully, cheerfully on board with oligarchy. 

Nothing suits Johnson better than the Trump administration’s plan to cut taxes for the very rich and slash entitlements to pay for it.

This was the gist of his appearance at the Politico breakfast this week, where he was introduced as someone who will have “a big role” in tax battle, having played “a very important role” in Trump’s 2017 tax cut. 

Johnson basked in the glow, recalling how he held up the whole 2017 law until he managed to shoehorn in a big tax cut for “pass-through corporations” Johnson confirmed that he personally benefited from the change in the tax code that he pushed through in 2017. He cast the deciding vote for Trump’s tax code rewrite giving corporations tax cuts worth $1.4 billion — but only after he arm-twisted Trump and Congress into including special benefits for so-called “pass-through” corporations — companies like his own PACUR plastics firm — whose profits are distributed to their owners. A few months later, Johnson began the process of selling his company, reaping the benefits of the tax law change, which increased the value of pass-through companies and made him more money on the sale.

According to Politifact, “Analyses from the Joint Committee on Taxation and the National Bureau of Economic Research have found that ultra-wealthy Americans have received billions in tax savings stemming from that deduction, while those earning less have gotten less of a break.”  The news organization cites one study by the National Bureau of Economic Research that found the top 1% of Americans received nearly 60% of the tax savings created by the provision, with most of that amount going to the top 0.1%.

“I made sure all the passthroughs got a tax cut, that was my contribution,” Johnson said. 

“Whatever we do, we need to make it permanent,” Johnson said of the individual income and estate tax provisions of the 2017 Trump tax law. That law was heavily skewed to the rich. Households with incomes in the top 1% will receive an average tax cut of more than $60,000 in 2025, compared to an average tax cut of less than $500 for households in the bottom 60%, according to the Tax Policy Center.

Thanks to the law, revenue as a share of GDP has fallen from about 19.5% in the Bush years to just 16.3% in the years immediately following the Trump tax cuts, according to the Center on Budget and Policy Priorities. That leaves commitments to Social Security and health care benefits for retirees in jeopardy, the Center concludes.

Nor did the tax cut yield the big benefits Trump projected. ​​New research shows that workers who earned less than about $114,000 on average in 2016 saw “no change in earnings” from the corporate tax rate cut, while top executive salaries increased sharply, the Center reports. “Similarly, rigorous research concluded that the tax law’s 20% pass-through deduction, which was skewed in favor of wealthy business owners, has largely failed to trickle down to workers in those companies who aren’t owners.”

Yet making those tax cuts permanent is among the “top priorities” for Congress and the new administration, Johnson said. His biggest contribution to the next tax debate will be his push to rewrite the tax code and “keep it simple,” and cut spending to pay for more cuts. 

“We have to return spending levels to some reasonable pre-pandemic levels,” he told the audience at the Politico breakfast. Building Trump’s border wall and keeping low taxes that benefit the very rich are the top two priorities for government, Johnson said.

Everyone would be able to see the wisdom of that program, as long you “keep it simple,” he added. The formula he laid out was “eliminate expenditures” and then you can dramatically cut rates. 

He wants to “free corporations from all this complexity in the tax code,” he said, adding he favors “a corporate tax rate of zero.”

Health care and Social Security, though? Not so much.“Stop trying to socially and economically engineer through the tax system,” Johnson advised. 

Let the rich keep their money. Slash the safety net. It’s simple.