In thinking back over the past few weeks, it is hard to decide which topics to address. The President attacking the Mayor of San Juan while she is trying to rescue people and he is playing golf would be absurd in any other scenario. I do wonder, however, what it will take in terms of vulgar and dishonest behavior to make the Republican leaders break publicly with the President. There appears to be nothing he could do to make Paul Ryan finally hit a gorge factor, and as for Mitch McConnell, I am sure he is relieved that the President is currently dumping his vitriol on someone other than Mitch.
All of this tolerance, we are told, is because now finally we can have real tax reform. Well, with the plan rolled out this week, I think it is very unlikely. First, of course, comes the mendacity involving tax reductions for the wealthy. There are many, which is not unusual since they pay most of the taxes. It would be nice if Steven Mnuchin, our Treasury Secretary, could just be honest about that. It is not arguable yet he wants to act like it isn’t there.
The larger problems are with the treatment of pass-throughs and the lowering of the corporate tax rate to 20% from 35%. Now the reason for that, we are told, is to produce jobs. So why not, as a friend suggested the other night over dinner, give the credit for the amount paid to employees in new jobs. If there are none, the rate stays the same. If you produce a new job, you can deduct all the costs as a tax credit to get you to the 20%. As my friend said, let’s borrow the line from Reagan, “trust but verify.” No new jobs, no corporate tax cut.
Finally, how do we deal with the deficit? Well, as I referred to in an earlier missive, the idea of “dynamic scoring” solves all problems. What we have is a tax idea that is predicated on producing growth of around 3% per year for 10 years. No tax cut has ever done that. There was a tax cut to reduce the highest marginal rate from 90% under Kennedy, but other than that, the outcome on the deficit of tax cuts is not a pretty picture. In fact, the last time the budget was balanced was after a tax increase under Clinton.
So, we’re dealing with a tax cut that will help the rich, and people who live in states that have a state income tax will probably get a tax increase since that deduction must go away to eliminate one-third of the increased deficit this plan will produce. And, for this, Republicans of character are willing to ignore Trump’s inappropriate behavior? As someone far wiser than me once wrote, “the only thing necessary for the triumph of evil is for good [people] to do nothing.”