This USA Today Our View editorial is biased and unworthy of serious consideration. That said, it’s instructive of what Republicans will have to fight.
For instance, the editorial says “The measure’s cut in the corporate income tax rate from 35% to 20%, for example, could boost the economy. And its limit on the interest deduction for new mortgages has angered the powerful homebuilding and Realtor lobbies, which suggests that its drafters might be doing something right. But by the standards of President Reagan’s landmark 1986 tax reform, this plan is a major disappointment. It lacks fiscal discipline, is needlessly indulgent of the wealthy, and is purposely punitive to universities, college students and people who live in high-tax states. Taken as a whole, this plan is partisan, even petty.”
Let’s examine that. It isn’t that cutting “the corporate income tax rate from 35% to 20%” might boost the economy. Cutting that tax rate will boost the economy. The DJIA is chomping at the bit waiting for that tax rate cut. If it becomes reality, expect companies to invest that extra capital into hiring extra R & D personnel. Expect small businesses to buy new equipment, which, in turn, will strengthen the manufacturing sector and durable goods orders.
With consumer confidence shooting through the roof, it likely wouldn’t take much to get the economy roaring. It’s disappointing, though predictable, for the editorial to say that the tax plan “is needlessly indulgent of the wealthy.” President Reagan was fond of saying that it’s impossible to be pro-jobs and anti-employer. The first Reagan tax cuts were on capital gains with the intent on getting Detroit back on its feet. It worked magnificently. Then there’s this:
Preliminary estimates are that it would increase deficits by $1.5 trillion over 10 years. To put that in perspective, an only slightly different cast of GOP lawmakers screamed bloody murder in 2009 over an Obama economic stimulus plan half that size. Republicans were deficit hawks then. Now, not so much.
I wrote about the stimulus back in the day. It just threw money at people. Republicans predicted that it wouldn’t spur the economy. The Republicans’ predictions were right. Further, Republicans argued that the Obama stimulus was nothing but pork. They were right. It’s foolish to argue that the Republicans’ Tax Cuts and Jobs Act is nothing but pork and special favors. Predictably, though, that’s what the Democrats are doing.
Finally, saying that “an only slightly different cast of GOP lawmakers screamed bloody murder in 2009 over an Obama economic stimulus” is mathematically insulting. There were 178 Republicans in the House in 2009. There are 239 Republicans in the House as of Oct. 21. That’s a difference of 61 Republicans in the House. I wouldn’t call that a “slightly different cast of GOP lawmakers.”
Then there’s this BS:
The biggest flaw in the GOP plan is that, for all the rhetoric about helping the middle class, it is tilted toward the wealthy. Benefits for the rich include:
Termination of the tax on inherited wealth, a priority of wealthy GOP donors but not many other Americans. Immediately upon passage, estates of up to $22 million could be passed on to heirs tax-free. After six years, estates of any size could be passed on tax-free. Over a decade, this change alone would drain $172 billion from the Treasury.
The wealth that’s been accumulated in these estates has been taxed already. It’s been taxed at a high rate, too. There’s nothing moral about the government taxing estates twice.
Further, this doesn’t benefit the wealthy. People like the Gates family, the Clinton family or the Dayton family create foundations to shelter their wealth. Family farmers would benefit from this. Small business owners would benefit, too.