In what has been boasted as the biggest tax cut in thirty years, President Trump’s administration unveiled a nothing short of dramatic plan to overhaul the US tax code, a move that can be described as one of the most important tests for his young presidency.
With the Democrats objecting by default, obviously, the broad tax-cut package seeks to put America back to work again by sparking a sustained economic growth, i.e. a 3% GDP increase for 2017 and counting forward.
President Trump’s proposal on Wednesday includes a fifteen percent tax for all businesses, together with decreased individual rates, a larger standard tax deduction for middle income households and the repeal of minimum taxes together with (a nice move) the repeal of the estate tax.
Some say that Trump’s tax plan puts him on a narrow path to achieving victory, as the legislation has minor chances of getting through Congress, as the Democrats will vote against it on the general principle whilst some of the REPs/RINOS will object to it at least on some issues if not the whole deal.
President Trump’s Director of the National Economic Council, Gary Cohn respectively has said about the proposals:
“Clearly, we have a unique opportunity to do something major here. It’s our intention to create a huge tax cut, and equally as important, a huge simplification of the tax system in America.”
Democrats will line up against this plan no matter what. It will come down to the effect that the plan will have on deficits in future years and, correspondingly, over national debt. If the numbers don’t add up, it will be hard to get the balanced budget contingent in the Republican party to go along, because they don’t tend to be big believers in the Laffer Curve. The effect of this plan on revenue is the heart of the matter.
However, this plan has more implicit chandeliers and negotiating points than a mansion of thieves. On the surface, it clearly suggests that such a massive tax cut will require massive cost cuts. But now that the ACA thingy is on hold, one wonders where they might come from. Of course we could just run up the deficit.
Yet, Trump’s plan is all based on the assumption that lower taxes will promote growth and bring in more revenue, i.e. No cuts are required. Well, we’ll just have to wait and see about that.
PHOTO:MICHAEL REYNOLDS/EUROPEAN PRESSPHOTO AGENCY