The Tax Overhaul Is Proof that Money in Politics Affects All of Us

The tax overhaul should put to rest once and for all any doubts about the real-world impact of the Supreme Court’s evisceration of campaign finance law.

December 4, 2017

As Republicans in the Senate pushed a giant tax overhaul last week, the media took on many angles, from winners and losers, to subplots ranging from politicized churches to actor Paul Newman’s charitable foundation. But one dimension deserves far more attention: the role that vast sums of political money — much of it unleashed by Citizens United and other court cases — played in setting the agenda.

Republicans in Congress have been surprisingly forthright that they are pressing ahead a broadly unpopular set of tax code changes to satisfy their major donors. It is no secret that large donors have more sway than the average voter — but we have truly crossed the Rubicon when donor demands become an acceptable justification for major legislation. This should put to rest once and for all any doubts about the real-world impact of the Supreme Court’s evisceration of campaign finance law.

As many have noted, this seems like an odd time to enact a $1.5 trillion tax cut package primarily benefiting large corporations and the wealthy, while raising taxes for many in the middle class. We just had an election dominated by anger at the political and economic status quo, in which the so-called “forgotten men and women”— middle and working class people who have missed out on decades of economic growth — cast the deciding votes. Indeed, polls show that most people think the GOP tax cuts will not benefit them, and overwhelming majorities oppose the elimination of popular deductions for wage earners, like that for state and local taxes. And the package does not fare any better among the experts, with most leading economists doubting it will actually spur significant growth.

So why is the train still moving? Well, as one representative from a super PAC funded by the billionaire Koch Brothers recently warned, if Republicans fail to cut taxes for business, “there are going to be consequences.” The Kochs and their fellow mega-donors have contributed the lion’s share of the over $3.3 billion in new spending that has flooded into federal races since Citizens United. And they will benefit hugely from the proposed tax cuts. Eleven families who spent a total of $205 million on federal races in 2016 could save as much as $67.5 billion just from repeal of the federal estate tax. And corporate lobbyists were so involved in crafting the Senate’s tax bill that they were the ones circulating last-minute changes to the Democrats.

In short, campaign donors are not only far wealthier on average than their fellow citizens, but also have very different priorities. Studies show that representatives’ voting records track the preferences of their donors more than the preferences of ordinary voters or even wealthy, politically-active non-donors. All of which has fueled an ever-wider disconnect between the political elite and ordinary citizens (one that we should note, lest Democrats be tempted to gloat, is thoroughly bipartisan).

This divide has alienated many Americans from our political system. Distrust of government is at unprecedented levels. According to a recent Associated Press poll, three quarters of Americans feel they lack influence in Washington. Only fourteen percent have a great deal of confidence in the Executive Branch; for Congress, the number was six percent. These results mirror those of other recent surveys.

Americans know that unrestricted campaign money is a big part of the problem. In the AP survey, eighty percent of respondents said the wealthy have too much political influence. Ninety-three percent in another survey said they thought elected officials listen more to big donors than their constituents. Millennials are especially concerned about this issue, which was a key factor driving their 2016 support for Bernie Sanders, who railed against Citizens United.

Ironically, many took Sanders’ unexpected strength — and that of President Trump, who Hillary Clinton outraised almost 2-1 — as proof that campaign money simply does not matter. But recent events tell a different story. While money does not always determine the outcome, those who have it still get to call the shots — especially when they bankroll down-ballot races that don’t get the same free media as a major presidential campaign. That is why Congress is poised to pass sweeping tax cuts that the public doesn’t want, but donors desperately do.

If we want government to be truly responsive to most Americans, we need to address our broken campaign finance system. This is something the public supports; in fact, outside the Beltway, few issues enjoy as much consensus. And while the Supreme Court has taken some sensible policies off the table, others remain constitutional.

One is transparency. An immediate priority should be to ensure that any final tax overhaul excludes the House’s repeal of the so-called “Johnson Amendment” barring tax-exempt 501(c)(3) entities from intervening in politics, which would turn them into conduits for secret campaign spending. Other measures, including stronger campaign contribution limits and public financing, don’t stand much chance of passing Congress now, but ought to be championed in the states. It is also essential to continue pushing for better enforcement of existing laws and, over the long term, a change of course by the Supreme Court.

In this unstable and fractious time, it is easy to get distracted by the latest crisis and lose sight of the underlying problems that got us to where we are today. We cannot allow that to happen. Politicians come and go, and laws can be changed, but if we want a to have a truly prosperous society over the long-term, we will need  a political system in which all Americans have a meaningful stake.