Listen to Prof. Brian Domitrovic as he talks at length about tax reform with the Americhicks, Kim Monson and Molly Vogt.
David Smick is in today’s Wall Street Journal talking tax reform:
If the GOP proposal isn’t aimed at helping workers, Trump will ask Democrats for a counteroffer.
Ultimately, Republicans are being forced to play small ball because a group of GOP deficit hawks worry that a big tax reform would undermine the budget. This fear seems out of proportion. Since 2000, under a Republican president and then a Democratic one, the national debt has soared from $5 trillion to nearly $20 trillion. The fiscal situation will only worsen with the coming entitlement-funding nightmare. Fretting about the deficit now is like worrying about a flickering candle in the front parlor when the entire house is on fire and the roof is about to cave in. Besides, true tax reform would eliminate deductions just as boldly as it slashes rates, achieving revenue neutrality.
Republicans shouldn’t play small ball. Their goal should be a tax-reform plan that will create robust economic growth, which in turn will help heal a bitterly divided nation. What would such a plan look like? Helping wage earners via tax policy is not a simple matter. People who earn less than $50,000 a year pay an average effective income-tax rate of 4.3%. What’s killing them is the payroll tax combined with the rising cost of health care. At minimum, the standard deduction should be tripled. But reformers also need to think creatively. Tax reform, entitlement reform and health-care reform cannot be considered in isolation. Working families need relief across the board.
That requires a bigger play than what some on Capitol Hill have in mind. But in the end, growth is everything. As he was preparing to run for president in 1980, Ronald Reagan was warned in a strategy meeting I attended about John Connally, a fellow candidate in the Republican primary. Connally, a former Texas governor, was raising big bucks from big business. By comparison, Reagan’s campaign coffers were lean. The future president’s response was aggressive. “Let him have the Fortune 500,” Reagan shouted. “I’ll take Main Street over Wall Street.”
This kind of “lunch pail” capitalism won Reagan the election and transformed the GOP—and the country. Isn’t it time for more “lunch pail” policy-making from Washington?
John Tamny today:
The problem is that policy types from the left and right don’t necessarily see it that way. Washington Post editorial board member Catherine Rampell sees it as unfortunate and irresponsible that President Trump “is hellbent on passing a massive tax cut for the rich.” And while Trump perhaps doesn’t know why such a tax reduction would be great, Rampell should. Rampell as mentioned works for the Washington Post, and because she does is likely more aware than most of the modern difficulties experienced by the newspaper industry. The Post was saved by billionaire Jeff Bezos, Carlos Slim saved the New York Times, and one can only hope that one or a few experimental billionaires will direct their untaxed wealth toward the Los Angeles Times. If Rampell hasn’t picked up a copy of the latter recently, she would likely find doing so illuminating for a read of what was once the world’s most profitable newspaper revealing what the Post might have become absent Bezos.
John Tamny and Steve Moore join host Bill Walton in this On Common Ground podcast to discuss achieving 4% economic growth.