Republican Party Platform (Part 1 of ?)


I got a copy of the draft 2016 Republican Party Platform. It’s subject to amendment through this morning, so I will compare to the finished product when it becomes available.

Restoring the American Dream

Rebuilding the Economy and Creating Jobs

This section is just statistics and criticism of Obama for the economy not performing as well as it usually does post-recession. No specific policies suggested, so there’s no real criticism here.

Fair and Simple Taxes for Growth and Jobs

“Our proposal is straightforward. Whenever taxes penalize thrift or discourage investment, they must be lowered. Whenever current provisions of the code are disincentives for economic growth, they must be changed.”

Again, few specifics in this section, but the second sentence has interesting ramifications. Theoretically, what we want for economic growth is economic activity. Thrift–especially by the wealthy–is harmful to the economy because spending money is what generates economic activity. If a corporation is thrifty by maintaining high profits while paying large portions of its workforce wages at or near the minimum wage, this is a thrift that should be penalized. If your idea of investment is to buy real estate and invest the bare minimum to make the property available for rent, this is not positive economic activity. We should encourage investment in companies that improve the world while discouraging investment in companies that prey on the public. Not all investment is good.

Fundamental Tax Principles

A few things here worth mentioning:

  1. Opposing “tax policies that deliberately divide Americans or promote class warfare.” No one likes taxes. The wealthy view paying increased taxes as class warfare, while the poor may look at those same policies as improving equity. The current cap on Social Security contributions is seen as fair by the wealthy–as there’s a limit on what they can get from the system–but it’s seen as punishing the poor by taxing a higher percentage of their income.
  2. Maintaining the tax-free status of religious organizations. I think there should be a difference between money donated to and spent by a religious organization for the purpose of religion and money donated to and spent by a religious organization for charity. A megachurch pastor shouldn’t get his home and income tax-free. If your church endorses specific candidates for public office, that’s not religion, that’s politics, and it should be taxed accordingly.
  3. Calling for a value added tax or national sales tax with the simultaneous repeal of Amendment XVI (the amendment that authorized the income tax). I’m not opposed to a national sales tax in principle, but I think it should be phased in as the income tax is phased out. An immediate switch could be catastrophic for the economy. I also think we need to be very careful about how we implement a sales tax. If it shifts the burden of taxation to the poor, there’s a problem.

American Competitiveness in the Global Economy

This section is criminally misleading. Yes, the U.S. has the highest (or one of the highest, depending on your source) corporate tax rates in the world. If that rate was what corporations actually paid, this would be a problem. But it’s not.

According to The Congressional Research Service, the effective corporate tax rate is comparable to that of other OECD countries, once standard deductions are included. If you compare the tax rates weighted for GDP, the U.S. tax rate is 27.1% and the rest of the OECD is 27.7%. Office of Management and Budget figures show the percent of taxes paid by U.S. corporations is 10%, compared to 32% in 1952. Corporate tax deductions need to be reworked to reward producers and penalize leeches. I’m not sure the GOP knows the difference.

International Trade

“We need better negotiated trade agreements that put America first.”

Trade agreements are not a zero-sum game. It is rarely a case of one country winning and another losing. More often it is a case of boosting already strong sectors of the U.S. economy while sacrificing sectors that are struggling. There are problems with the way the U.S. negotiates trade agreements, because once government negotiators get enough experience to be effective they are poached by the private sector, but I don’t see the Republicans addressing that problem.

The call for China to stop excluding “U.S. products from government purchases” is hilarious in its naïvete. The bargaining chip there is ridiculously simple: Open U.S. contracts to Chinese products. Because far more industry in China is state-owned than in the U.S., we would be opening far less competition here than China would be opening there. But, of course, China’s negotiators are probably too smart to let that go as an even trade. Regardless, complaining about another country doing the same thing we do is a bit silly.

Restoring Financial Markets

Dodd-Frank wasn’t perfect, but it did introduce much-needed regulation into portions of the financial industry that were neglected–and which, contrary to what the platform says, contributed heavily to the 2008 recession. The GOP is correct when it says Dodd-Frank imposed a heavy regulatory burden on small banks, inadvertently allowing large banks to grow faster as they could more easily absorb that burden. One of the largest problems in government overall is the tendency to add new regulatory paperwork requirements while it never goes back to old requirements to reduce or eliminate obsolete or redundant paperwork.

The bulk of this section is a rant against the Consumer Financial Protection Bureau. As with Dodd-Frank–and Obamacare, and untold other government entities–the default method of fixing something for the Republicans is to eliminate it and start over. Sometimes, yes, things are so bad that you just need to get rid of it and begin anew, but most of the time the problem is something you can fix. You don’t get rid of your car just because it needs a new oil filter.

Rebuilding Home Ownership and Rental Opportunities

The GOP, once again, blames the government rather than private lenders for the housing crisis that caused the 2008 recession. As a result, the GOP wants to roll back environmental regulations on home purchases and eliminate lending requirements based on race for Fannie Mae, Freddie Mac, and federally-insured banks. I am fairly confident that the U.S. has not reached a level playing field for mortgage lending, so removing race-based quotas is premature. I could see removing the quotas on a case-by-case basis, if an institution has shown a pattern of compliance over a significant period. Environmental regulations may need to be updated and streamlined, but older homes still have lead-based paint, and the government is usually the only defense against other environmental contaminants.

Finally, the GOP wants to make sure that zoning decisions are made at the local level. Too often, zoning is used for gentrification purposes, at the expense of established minority neighborhoods. It sometimes seems like zoning officials get their marching orders from Rick Tyler.

America on the Move: Transportation

There are several policy recommendations in this section. First, the GOP wants to remove non-highway-related programs from being funded by the Highway Trust Fund, including mass transit, bike-share programs, sidewalks, and scenic byways: “These worthwhile enterprises should be funded through other sources.” If I had any confidence that these would be funded through other sources, I would wholeheartedly approve this initiative. However, state and local governments–especially Republican-controlled governments–are almost universally hostile to the idea of funding mass-transit or urban transportation programs, like bike-share and sidewalks. I think on this issue, what the Republicans criticize for “coerc(ing) people out of their cars,” is actually a pretty good thing. We should encourage people to live near their jobs and encourage companies to allow as many employees as possible to work from home.

Again, the GOP wants to lower environmental protections, this time in the National Environmental Policy Act–ironically, signed into law by Richard Nixon. They want to get rid of worker protections, namely the Davis-Bacon Act, which require government contracts to pay workers the prevailing wage in an area. The GOP also opposes an increase in the federal gas tax, which is problematic, since the tax is set at 18.4 cents per gallon instead of being set as a percent rate. As a result, since the tax has not increased since 1993, when accounting for inflation the tax should be about 30 cents per gallon. This tax should be converted to a percent rate.

Finally, the GOP wants to encourage private investment in rail and high-speed rail transportation. I’m skeptical on this point, as I am not sure the infrastructure investment is something that can be handled privately, especially with the right-of-way purchases required. The start of the California high-speed rail system is a comedy of errors, especially starting in the middle instead of at either end toward the outer suburbs where people already commute, but I don’t think removing federal funding is necessarily the answer.

Five pages down, fifty-three to go. Not sure how many sections overall. Tomorrow, I will take a break to do my candidate analysis for the August primary.


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Filed under Republicans, Taxation, Uncategorized

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