Republicans have very nearly finalized their tax reform legislation. We hope they iron out last-minute disagreements and pass it without delay. It will make Christmas merrier.
Republican senators and the Senate leadership owe it to the public to be flexible with one another lest so much work on such a crucial bill be squandered.
Reform has been a very long time coming. Regardless of the top marginal tax rates, the tax code’s complexity, unfairness, and distortion of economic activity have continued unabated for decades. The only worthy regret about this reform package, the biggest in more than 30 years, is that it couldn’t have been more comprehensive. A good case could have been made, but wasn't, for starting over from scratch. In an imperfect world, however, a step in the right direction is often the best outcome. And certainly in this case, it is much better than leaving things as they are.
Debate over this bill has been dishonest. Hyperventilating Democrats, like so many Chicken Littles, predict the end of America or even the world because the corporate tax rate will come down to 20-21 percent. You'd think from their squawking that the 35 percent rate is what made America great. We checked the wording of the Constitution and the national anthem and can reassure that the current world-beating rate is not mentioned there.
Unlike standard political rhetoric, which lends credibility to lies by adopting a semblance of truth, Democratic argument on this reform bill has been so excessive that it rings hollow, and has thus failed to capture the public’s imagination. Even the shopworn premise that this bill (like all Republican tax bills, apparently) is a "giveaway" to the rich is simply not credible this time. Far from cutting taxes for the wealthy at the expense of the poor, the GOP reform's simplification of the individual income tax will overwhelmingly help families with children and lower or middle incomes. These are the people most likely to take the standard deduction, and who pay a higher percentage of their income in corporate taxes when businesses, inevitably, pass on their high tax bills to consumers in higher prices.
Some individual taxpayers will pay more tax as a result of the Republican reforms, but it will be high-income earners, mostly in high-tax states — people with six-figure incomes who itemize deductions, bought expensive homes in excellent school districts, and elect high-spending Democratic local governments. This is why Democrats are now shouting so loudly, raging against tax increases for the wealthy, after years of pretending to care about the well-being of lower-income working families.
The sharp cut in corporate tax rates will end the federal government’s counterproductive policy of encouraging American companies to repatriate themselves and engage in activity unconducive to economic growth.
Cutting the corporate tax rate and eliminating loopholes is sound. The current code encourages so many unproductive or counterproductive business decisions that prevent American companies from competing internationally, and strangle the domestic economy as well. A lower corporate rate with fewer loopholes could unleash economic growth on a scale that most people seem to have forgotten is possible.
Against a headwind of absurd falsehoods, Republicans have done well to get this far with tax reform. Now they must take the last few steps to the finish line and a successful end to the current congressional session.