Tax cuts are the most important project Congress is currently working on. If successful, they will result in explosive economic growth, more jobs, higher wages, and a better quality of life. The GOP framework for tax reform is good for the middle class, good for families, good for the economy, and good for the country.
For all these reasons, you would think tax reform would be a no-brainer. Yet tax reform has eluded the Congress for three decades, even as the complexities of the tax code expanded each year. It is known in Washington as one of the most difficult legislative accomplishments to achieve. Even when it was last done in 1986, it seemed like a miracle. As popular as tax reform is in the real world, it has some very big enemies in Washington, D.C.
With their ambitious tax-reform plan, Republicans are staring down a coalition of very powerful forces in Washington that are lined up to defeat it. For their part, Democrats are dogmatically opposed to anything President Trump wants to accomplish. Tax reform, especially tax cuts for the middle class, are unequivocally good for their constituents, but Democrats are planning to oppose the package. And why? Because it’s good for President Trump as well.
Another sworn enemy of common-sense tax reform is the biased main stream media, which is also reflexively anti-Trump. Even the relatively sparse details of the GOP framework that were released two weeks ago were maligned by commentators on the left for made-up reasons.
The GOP framework doubles the standard deduction. That means many more people would be paying zero taxes under the Republican plan. Yet because the lowest tax bracket under the GOP plan would be 12 percent (the current lowest is 10 percent — a bracket which would disappear as those paying it fall off the income-tax rolls), many in the media falsely claimed the plan raised taxes on the lowest-income earners. In fact, the opposite was true. Their purposefully simplified analysis was completely misleading.
It’s difficult to simplify the tax code for the same reason that the tax code is complicated in the first place: each loophole benefits some special interest with an army of lobbyists to support it. The GOP framework calls for eliminating most, if not all, of these loopholes, and replacing them with a much lower tax rate for families and business.
Tax reform relies on a simple equation: If you have more taxpayers, you can have lower taxes. Many hands make light work. Within the tax code, the way you create more taxpayers, or “broaden the tax base,” is to eliminate loopholes that allow special interests to escape their tax burden.
But those special-interest loopholes only benefit the biggest companies and richest individuals. They benefit those who can afford lobbyists and political donations to protect them. In fact, for this reason, those on the left decrying the GOP plan as a tax cut for the rich are dead wrong. The opposite is true. The current tax code, with all its loopholes, is a tax cut for the rich, and the GOP framework takes that tax cut away and gives it to the middle class.
Tax reform, like the kind proposed in the Republican framework, is without a question a public good. That fact, however, won’t stop the Democrats and the media and the army of corporate lobbyists from maligning any proposal. There’s big money at stake, and these powerful forces won’t be deterred.
However, Congress is closer now than ever before to true consensus. In the coming months, meaningful tax reform has a real shot at passing, and that’s good news to everyone outside the Beltway!
This piece originally appeared in The Hill 10/14/17