From today’s Wall Street Journal on SALT deductions:
From today’s Wall Street Journal on SALT deductions:
Today’s opinion pages of the Wall Street Journal are worth the price of admission. See Larry Lindsey talk tax reform and see John Tamny talk about debt and the economic future in Puerto Rico.
Expect 3.2% growth, mostly taking the form of higher real wages. It happened in the 1960s.
Wiping out creditors would simply enable more dysfunction.
Former US Senator Phil Gramm writes about tax reform in today’s Wall Street Journal:
It does not necessarily follow that higher tax rates increase revenue. By raising taxes on top income earners, the Obama administration planned to raise $620 billion over 10 years. Redistributionists should be a little sobered by the fact that in the 10 years following the Obama tax increases the government is now on track to lose $3.2 trillion in revenue due to a decline in economic growth.
Despite Sweden’s and France’s willingness to impose higher marginal rates on the rich, it would appear that there are limits in the real world to how much tax blood can be extracted from wealthy turnips. The experience of OECD countries strongly suggests that in high-spending countries with high marginal tax rates and low economic growth, an increasing share of the tax burden is actually shifted from high-income individuals to the middle class.
It is equally clear that by stimulating growth, the Reagan tax cuts produced more revenue and increased the share of taxes paid by the rich. The share of income taxes paid by the top 10% of earners, which had been falling prior to the Reagan tax cuts, increased 20% during Reagan’s presidency. The U.S. government collected 19% more real revenues the day Reagan left office than the day he came into office, even though inflation had been broken, bracket creep repealed, and tax rates reduced dramatically.
From Americans for Tax Reform via their website:
Speaker of the House Paul Ryan recently sat down for a Facebook Live chat with ATR President Grover Norquist to discuss plans to radically reform America’s cumbersome and uncompetitive tax system – making it simpler and fairer for American families, workers, and businesses.
Speaking to Grover, Ryan flagged a number of reforms including the doubling of the standard deduction and consolidating the current 7 tax brackets into just 3 – 12, 25 and 35 percent. The change will bring income earners into lower brackets, allowing workers in all brackets to take home more of their own money. Many of those on low incomes will fall into the 0% bracket and won’t need to pay income tax at all. With so many lower and middle income Americans shouldering an ever-growing tax burden, the changes offer respite to those who need it the most.
But the reforms also radically simplify the system. 9 out of 10 US taxpayers currently need to enlist accountants to complete their taxes. Removing complex itemized deductions in favor of a simple doubled standard deduction allows taxpayers to replace complicated, multiple-page forms with a simple postcard-sized return. These returns can be filled out in minutes rather than days, with no professional help.
Grover also asked Speaker Ryan about his commitment to ATR’s Taxpayer Protection Pledge – a written commitment to taxpayers to oppose and vote against all income tax increases. Over 1,400 officials nationwide have taken the pledge. Ryan, a signatory since 1998, noted that the reforms are consistent with his commitment by ensuring that no individuals or businesses are worse off as all deductions and credits eliminated are met or exceeded by a matching tax cut.
Speaker Ryan and the current administration should be commended for making badly needed tax reform a priority. These timely changes will attract investment, create jobs, foster competition and grow the paychecks of working people nationwide.
A brief summary of the uniform tax reform framework can be viewed here.
Glenn Hubbard makes his case for tax reform in this morning’s Wall Street Journal.
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?
See John Tamny in today’s Wall Street Journal: