Wednesday, June 28, 2017
 
Trump Tax-Cut Proposal Draws Mostly Scoffs, from Economists and Comment Boards Alike

WASHINGTON, D.C. April 28 (DPI) – In an apparent bid to look productive in his first 100 days, Donald Trump yesterday rushed out a vague tax-cut proposal that was criticized by almost every tier of America: Economists, media pundits, even everyday posters on comment boards.

Never mind that the US tax code, 30 years after Reagan’s tax cuts, is once again a byzantine mess and its simplification is a clear priority. But the notion that tax reform would only benefit the “wealthy” – and especially Trump himself – gives such a proposal long odds of passage, even with a Republican-controlled congress, according to The Wall Street Journal and other credible sources.

The top 20% of American earners already pay about 84% of all income taxes in dollar terms, so the tax code is already decidedly “progressive” – its sins though lie in a mishmash of exemptions and loopholes that create the perception of widespread evasion, especially by corporations and large taxpayers.

Even average Americans are recognizing that tax cuts that aren’t “revenue neutral” – that is, that aren’t accompanied by commensurate spending cuts – can worsen the nation’s gaping public deficits, and that issue has been part of the reaction as well.

Ordinarily a proposal for a tax cut would win applause from the GOP political base – just like a call for increased government benefits would be a boon to Democrats. But these are not ordinary times, and Donald Trump – ever impulsive, unpredictable and politically alienating – is no ordinary politician.  The proposal – which calls for simplification as well as cuts – isn’t getting serious consideration, largely because the new president has so little political influence and stature, the reaction suggests.

The prominent Democratic economist Larry Summers wanted to like Trump’s proposal, but in an op-ed yesterday wrote that the president is “undermining his own Treasury secretary” by rushing out what’s essentially a complex proposal on such a short timetable.

Comment boards across the internet – and the media – focused on the proposal’s bad optics – namely, that it is a form of trickle-down, supply-side, Laffer-curve economics, and that only the rich benefit from it.

But the originators of the tax-reform proposal – White House economic policy guru Gary Cohn and Treasury Secretary Steven Mnuchin – in the weeks ahead are likely to position the proposal as a simplification and reform package, and not a tax cut, once Trump’s First 100 Day political urgency ebbs.

 

 

 

Advertisements

Click Here!