Now or never on taxes

U.S. House Republican leaders yesterday put some flesh on the bones of that tax reform “framework” announced last month, and the product looks to be a good faith effort to reach consensus on those items near and dear to most Americans — and to provide relief to the middle class.

It is tax reform in the broadest sense of that word, intended to simplify the tax code, but also unleash the power of the American economy for too long stifled by one of the highest corporate tax rates in the world.

Already some of the deficit hawks are howling — it will add some $1.5 trillion over the next decade to the nation’s debt. But if it truly puts money back in the pockets of working Americans and jump-starts large and small businesses with tax cuts, well, that is worth the risk.

As House Speaker Paul Ryan put it, “For too long, hardworking Americans have suffered under a tax code that is too unfair, too complicated and too expensive. That ends this year. The Tax Cuts and Jobs Act will simplify the code so you can file your taxes on a form the size of a postcard.”

He estimated the average middle-class family will see a cut of more than $1,000 and the average small business one of some $3,000.

Its biggest compromises are the inclusion of a state and local property tax write-off of up to $10,000 (but no deduction for state income taxes), a $500,000 cap on new home-mortgage deductions and retention of deductions for retirement savings such as 401(k)s.

The big-ticket item, of course, is lowering the corporate tax rate to 20 percent from its current 35 percent — but that’s the one with the potential to truly remake the U.S. economy.

Yes, lots of moving parts here. And there will be lots of squealing from every group that has an interest in each and every line of the many-headed hydra of a tax code (in addition to the deficit hawks). But it is also the best chance for reform in more than a generation. It truly is a now or never moment.