- - Tuesday, October 31, 2017

ANALYSIS/OPINION:

As the Republicans take their mark in the tax overhaul race, the obstacle is not the clock but the mischief of the naysayers who are eager to tie the reformers’ shoelaces together. That would stop the race if not the clock. With the nation’s prosperity on the line, everything is at stake for both special interests and ordinary Americans.

Revenue is the life blood of government, and any attempt to alter the flow is met with trepidation, fear and loathing on Capitol Hill, and first among the denizens of the Grumpy Old Party. Democrats react with hair-raising screams. Nonetheless, Republican lawmakers will introduce on Wednesday the details of their tax cut bill, the first major overhaul in three decades. They have made common cause with President Trump’s campaign for lower taxes, which have been the apple of his eye from his perch at the White House. After the futile effort to replace Obamacare, nothing is more critical to making good on his pledge than to “make America great again.”

Focusing on the sweet spot that is tax relief for the middle class, Republicans aim to cut the corporate rate from a world-worst 35 percent to a business-friendly 20 percent. The effect, according to the Tax Foundation, would enable companies with more resources to raise salaries and hire new workers, resulting in an average annual pay increase of 2.8 percent and 600,000 new jobs. Some tax bill negotiators think the plan is too sweet, and Bloomberg News reports that they want to phase in the corporate rate reduction gradually over five years.

It’s in these devilish details where bitter opposition has escalated. Whispers of concern over suggested cuts to federal deductions for business interest and for employee 401(k)s have proliferated. Louder complaints echo over the future of write-offs of state and local taxes in high-tax states like California, New Jersey and New York. Gov. Andrew Cuomo of New York calls Republican House members “Benedict Arnolds” for endorsing a federal budget bill that enables tax reform to proceed with a simple majority vote. The powerful National Association of Home Builders disputes Republican talk of eliminating the home mortgage interest deduction.

All the while, widespread expectation over the promise of lower taxes has supercharged the economy, with the nation’s gross domestic product (GDP) hitting an annual rate of 3 percent growth during both the second and third quarters. Serving up economic catnip has been crucial to the president’s campaign to roll back Barack Obama’s regulatory burdens. The Federal Register has had to expand by 95,894 more pages over the Obama years.



Treasury Secretary Steven Mnuchin has warned Congresss that a failure to pass tax reform would suck the optimism out of the stock market. The return of pessimism would likely send the Dow crashing from its lofty perch above 23,000, taking a bite out the $5.2 trillion in new wealth that investors have accrued since Mr. Trump assumed office.

Democrats will try to trip up the Republican tax overhaul scheme at every turn, all to derail the Trump presidency, the interests of ordinary Americans be damned. Feigned Democratic fear that a loss of tax revenue would explode the deficit fails even the giggle test. Sen. Rob Portman, Ohio Republican, argues persuasively that GDP growth above 2.3 percent would offset an estimated $1.5 trillion lost to tax cuts. This would cut the deficit, not enlarge it.

If the Grumpy Old Party suffers another legislative failure to rival the Obamacare fiasco, the cries of “throw the bums out” would rise to an ear-splitting crescendo by November of next year.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide