More detriment than benefit in the new tax law?

W

ith last week’s passage by Congress of the tax reform bill known as the Tax Cuts and Jobs Act, the Orthodox Jewish community might be feeling the need to be frank with itself. What I have in mind is Thomas Frank.

He’s the journalist who, in 2004, wrote the best-selling book entitled What’s the Matter with Kansas? How Conservatives Won the Heart of America. Focusing on the experience of his native state of Kansas, Frank explores why in recent decades Kansans have become deeply conservative in their politics despite a history of more left-wing tendencies.

What deepens the mystery for Frank is that in throwing its support to the right, the Kansas electorate consistently supports policies that are against its own economic interests. For a synopsis of Frank’s thesis, I quote from a review of the book in Commentary:

Today’s electoral trends strike Frank not only as counterintuitive but as a strange anomaly in American history. As he wistfully notes: …[e]ven into the postwar years, Kansans were eager supporters of the New Deal and regularly sent Democrats to Washington.

What changed? The answer, Frank believes, is that conservative demagogues have whipped the voters of the Great Plains into a condition of “derangement” over social and cultural issues.... At election time, outraged Middle Americans embrace the only people who dare to stand against this deluge: the standard-bearers of the Right….

GOP politics, in short, is a giant game of bait-and-switch. Voters in Middle America send Republicans to Washington to fight the culture wars, and Republicans mollify them with empty gestures of protest — before getting down to the real business of cutting taxes, deregulating the economy, promoting free trade, and otherwise selling out the men and women who put them in office.

In other words, for Mr. Frank, conservative economic policies that favor deregulation and free trade and hinder unions are harmful to the working and middle classes, while benefiting the affluent. Yet the former vote for such policies anyway because devious Republican politicians distract them with culture war issues, on which these politicians never actually make progress in any event.

Even Democratic politicians, he argues, have played the same game: distinguishing themselves from Republicans on socio-cultural wedge issues, while cynically betraying their voters by adopting economically conservative policies in areas like welfare, free trade, and labor laws, so that they can benefit from financial support from corporate America. In this way, economic conservatism is universally the norm, while the parties fight only over a handful of very divisive cultural issues.

Frank is an unabashed liberal, albeit one who is very critical of his own side, and his arguments reflect his political beliefs. His book was widely hailed by liberals and panned on several grounds by conservatives like the author of the above-cited Commentary review. My purpose here, however, is not to litigate the merits of his thesis, but simply to note that a dynamic similar to the one he describes seems to be at work at this moment for this country’s Orthodox Jewish community.

Consider: Agudath Israel of America issued a statement following passage of the Tax Cuts and Jobs Act that read, in part: “As a threshold matter, we are deeply disappointed about the bill’s elimination of the deductibility of personal exemptions and the limitations placed on the deductibility of state and local taxes. As a high percentage of Orthodox Jews have large families, and reside in areas that are highly taxed, these changes will likely have a dramatically negative effect on large numbers of our community.”

The statement goes on to express Agudath Israel’s appreciation that some of its top priorities were included in the bill, such as “the expansion of ‘section 529 savings plans’ — championed in the Senate by Senator Ted Cruz (R–TX) — to include tax benefits for various elementary and secondary education costs, including private school tuition,” and the enhancement of “the child/family tax credit… thanks in substantial part to the diligent work of Senator Marco Rubio (R–FL)….”

Cruz, Rubio… Rubio, Cruz… Why do those names seem so familiar?

Anyway, the statement notes that while Agudath Israel is “gratified that the tax bill retains the deductibility of charitable contributions…. we share the concern of the nonprofit sector as to how the doubling of the ‘standard deduction’ might affect such giving.”

It should be noted, however, that “concern” is a very mild way of describing what many in the nonprofit world feel about the potential impact of this legislation. To explain, currently only taxpayers who itemize their deductions can take advantage of the tax breaks for charitable giving.

Since the new law doubles the standard deduction, the congressional Joint Committee on Taxation predicts a drop from the current 30% of Americans who itemize to just 5%, which means that close to 30 million American households will no longer benefit from a deduction for their charitable giving. This, according to Indiana University’s Lilly Family School of Philanthropy, will result in an annual reduction in charitable giving of $13 billion.

A potential drop of that magnitude should obviously be extremely disturbing to religious communities like those of Orthodox Jewry. But it concerns other religious communities, too, as Christianity Today magazine notes:

“This is a huge step toward eliminating the benefits and incentives of the charitable deduction altogether,” stated the Faith & Giving Coalition, of which the Evangelical Council for Financial Accountability is a member, in talking points released last week. “It also is a major step toward reversing our nation’s policy favoring and incentivizing charitable giving, which has been working well for over 100 years. This is devastating for our charitable organization and organizations like ours throughout the country”….

“Please pray for your senators who next week will vote on a tax bill that may have a major impact on our economy, our national debt, and on the level of charitable giving to your church and ministries,” wrote National Association of Evangelicals (NAE) president Leith Anderson, urging supporters to contact their senators with concerns that the current bills will “dramatically reduce” the benefit of the charitable deduction.

Evangelicals, evangelicals… Why does that term sound so familiar, too?

One bright spot in the new legislation is noted by the Agudath Israel statement when it commends Congress “for retaining the Johnson Amendment, which for decades has insulated religious entities and members of the clergy from the inevitable pressure and division they would face by being injected into political campaigns.” For those who aren’t familiar with the Johnson Amendment, I wrote about it here in May, saying that the current administration has

fixated on repeal of the Johnson Amendment, something religious freedom advocates consider either largely an irrelevancy (for a decade, churches actually have delivered videos of political endorsements from the pulpits to the IRS, daring it to prosecute, with no response) or actually harmful to religious institutions. Incredibly, that was the only thing the Republican presidential candidate mentioned in his convention speech that he’d do for “the evangelical community who have been so good to me.”

So, in sum, the new law passed by the Republican majorities in Congress and signed by the Republican president “will likely have a dramatically negative effect on large numbers of our community,” and might “result in an annual reduction in charitable giving of $13 billion,” some of which the innumerable mosdos haTorah v’chesed in our communities count on.

But don’t worry: The Republican Party is still the party of family values, isn’t it? Just ask Bill O’Reilly (or the numerous right-wing talk show hosts who continue to go on his show) and all the folks in Alabama who voted for Roy Moore. And we can still count on the Republicans to fight for us on all the important issues, can’t we? The ones really relevant to our lives as frum Jews, like defending the flag and the anthem from those kneeling football players.

It all sounds positively Frankian to me.

Originally featured in Mishpacha, Issue 691. Eytan Kobre may be contacted directly at kobre@mishpacha.com