tax-reform

No More Benefit of the Doubt

But we should not kid ourselves. If President Trump were to resign, the future President Pence would face just as much outrage and resistance from the left.

.. The man shoots himself in the foot on a near daily basis and, in the process, scuttles his agenda. If he is not going to listen and concurrently is going to decide he is the only voice that matters, the only expert in the room, and the only person who can defend his record in a job he admits is harder than he thought, no one should give him the benefit of the doubt any longer.

.. But the status quo of the Trump administration is going to do more long-term harm than good. He is going to enable and create a resurgent, combative Democratic Party that will undermine everything he has done and usher in impeachment hearings. He risks not just a loss of the House, but a loss of Republican seats orders of magnitude greater than the Democrats lost under Barack Obama.

.. President Trump beat Hillary Clinton, he appointed Neil Gorsuch to the Supreme Court, and now he risks everything else.

There will be no wall.

There will be no Obamacare repeal.

There will probably not even be substantive tax reform.

Trump’s Tax Proposal Is Just a Symptom of the Disease

No wonder this administration can’t get anything done. It specializes in wishful thinking.

This conveys the impression that the administration cares a lot about cutting taxes for very wealthy people and corporations, and considers the other elements of the plan to be filler, to be sketched in brief if at all.

.. Tell hundreds of thousands of government employees that they need to make a more business-friendly environment, and you’ll rapidly discover the terrifyingly myriad ways in which such a directive can be interpreted by individual minds. No, what you actually have to do is create rules to follow, all of them spelled out in mind-numbing minutiae.

Detail makes enemies.

Let’s revisit the personal deduction eliminations, for example. Going to get rid of the deduction for people with high medical expenses? Enjoy the frantic phone calls from patient groups. How about educational savings accounts? Are they going away? Stand by for the firestorm of indignation from middle-class parents. If the Trump administration actually tries to enact its plans, one by one, many of its ideas, so pleasing in vague summation, will become flesh, encounter political resistance, and die an early and gruesome death.

This Isn’t Tax Policy; It’s a Trump-Led Heist

This isn’t about “jobs,” as the White House claims. If it were, it might cut employment taxes, which genuinely do discourage hiring. Rather, it’s about huge payouts to the wealthiest Americans — and deficits be damned!

.. If Republicans embrace this “plan” after all their hand-wringing about deficits and debt, we should build a Grand Monument to Hypocrisy in their honor.

Trump’s tax “plan” is a betrayal of his voters. He talks of helping ordinary Americans even as he enriches tycoons like himself.

.. fewer than 10 percent of low-income households with children would get anything at all

.. families earning between $10,000 and $30,000 a year would receive an average child care benefit of just $10.

.. In fairness, Trump’s proposal does include some sensible elements. Raising the standard deduction is smart and would simplify everything, reducing cheating and the need for record-keeping because millions of filers would no longer itemize deductions.

.. It would eliminate the alternative minimum tax, without which Trump would have paid less than 4 percent in taxes for 2005; with it, he paid 25 percent.

.. two-thirds of active corporations paid no federal tax.

.. Even large, profitable corporations paid an average federal rate of only 14 percent — and Boeing, Verizon, General Electric and Priceline paid no federal income tax over a five-year period

.. The White House talks solemnly about protecting family farms and other businesses, but give us a break! The estate tax now affects only couples worth more than $11 million.

.. the estate tax does limit the rise of inequality and assures a hint of fairness, since much of the wealth in rich estates has never been taxed at all.

.. The Tax Policy Center examined Trump’s campaign tax plan and found it would cause the federal debt to rise by at least $7 trillion in the first decade, and more than $20 trillion by 2036 — slowing growth, not raising it. To put the latter number in perspective, that’s additional borrowing of about $160,000 per American household.

.. Effectively, we’d borrow from China or other countries to finance huge tax breaks for Trump and his minions. And this is populism?

Growth Can Solve the Debt Dilemma

Hitting a 3% target would result in an economy that’s nearly $13 trillion larger in 30 years.

But consider what happens to the CBO’s numbers assuming 3% annual growth. By 2040 the economy would expand not to $29.9 trillion, but to $38.3 trillion, according to an analysis by Research Affiliates, a California investment firm. That’s an additional output of $8.4 trillion—roughly the entire annual production today of every state west of the Mississippi River.
By 2047, the economy would grow to $47.1 trillion, almost $13 trillion more than the CBO’s baseline estimate. That would spin off new tax revenue to Washington of about $2.5 trillion each year.‎That money ought to be more than enough to pay all the bills and cover most of the unfunded costs of Social Security and Medicare. The old saying is right: The most powerful force in the universe is compound interest.

.. Many blue-chip economists agree with the CBO that a growth rate of about 2% is the best that America can achieve.

.. But the right policies can counter these trends. Productivity should surge with improvements in robotics, artificial intelligence and automation. Self-driving cars could cut transportation costs dramatically in coming years. Washington could facilitate this renaissance by giving companies an incentive to invest.

The Tax Foundation predicted last year that the House Republican tax reform alone would raise wages by 8%, GDP by 9% and capital investment by 28%.

.. at least seven million Americans in their prime working years—18 to 65—would be on the job today if labor-force participation had not dropped since 2000. A strong economy, paired with welfare reforms, could draw millions back to work.

.. And immigration is America’s natural demographic safety valve.