The G.O.P. Tax Plan Has a Fatal Flaw—and Neither the House Nor the Senate Can Fix It

Gary Cohn, Donald Trump’s top economic adviser, told CNBC’s John Harwood that the President had laid down “two really important principles” to guide the lawmakers and officials putting the legislation together.

“Number one is we have to deliver middle-class tax cuts to the hardworking families in this country,”

“Number two, our corporate tax system just is not competitive with the rest of the world. We have to create a corporate tax rate, and along with that a pass-through tax rate, that makes us competitive with the rest of the world so we can attract businesses back to the United States.”

.. Trump’s two principles have run into conflict with each other.

.. the Ryan bill would give taxpayers in the middle twenty per cent of the income distribution in 2018 a tax cut of eight hundred and forty dollars, or $16.15 a week, on average.

.. Compared to the $37,440 break that taxpayers in the top one per cent would receive

.. Over time, the modest tax breaks these people would initially receive would erode—and ten years from now many of them would be paying more money, not less, to the federal government.

.. the Republican tax proposals, which Trump has promoted by promising the biggest tax cuts in history, isn’t much of a tax cut at all in the sense that most Americans understand the term.

.. It’s really designed to reduce the tax burden on businesses and wealthy individuals, and it could only be justified if, defying history, it delivered the economy-wide upsurge in G.D.P. growth, capital investment, and wages that the White House has promised