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Analysis

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.

(Photo: Think­stock)