Donald Trump’s latest tax-cut plan would be a steroid injection for the U.S. economy. Bravo to the White House and congressional leaders for packaging the biggest pro-growth tax cut since Ronald Reagan.
My only quibble is that I wish the “Gang of Six” negotiators had stuck with President Trump’s call for a 15 percent business tax rate – which was in the campaign plan that Larry Kudlow and I helped draft. Instead, this plan would set the rate at 20 percent for corporations (down from 35 percent) and 25 percent for small businesses (down from 40 percent for many firms). This may not be as low as Trump wanted, but it is still a vast improvement for competitiveness over the current IRS code.
For all the blather about tax cuts for the rich, the average household in the United States with an income between about $40,000 and $100,000 would save about $1,500 to $2,500 on its tax bill due to the higher standard deduction and the lower tax rates. Maybe families can use that money to pay for the higher health-insurance premiums under Obamacare. As a cab driver told me when I asked him what he thought of the Trump tax plan: “Show me the money.”
But there are trip cords and land mines aplenty ahead. The GOP had better be ready to avoid another embarrassing policy defeat.
First, Republicans have to stop enslaving themselves to arcane and witless budget rules that are torpedoing their policy objectives. Paul Ryan and Mitch McConnell are letting the budget process – which was written by Democrats more than four decades ago – dictate the policy, rather than the reverse. Why, oh, why, are we still living under these rules of the 1974 budget act, which has created the greatest period of debt and deficits and runaway spending in American history?
The GOP controls every agency and committee of Congress. Why are they enabling the Congressional Budget Office and Joint Tax Committee to…