New life for Repub­li­can tax re­form

House Speaker Paul Ryan touts the tax plan that will get Amer­ica mov­ing again

The Washington Times Daily - - OPINION - By Don­ald Lam­bro Don­ald Lam­bro is a syn­di­cated colum­nist and con­trib­u­tor to The Wash­ing­ton Times.

House Speaker Paul Ryan’s up­lift­ing eco­nomic speech this week has breathed new life into the GOP’s tax re­form plan to get Amer­ica mov­ing again. In a time when the news out of the na­tion’s cap­i­tal has been largely fo­cused on mul­ti­ple in­ves­ti­ga­tions into the Trump ad­min­is­tra­tion and Russia’ s cy ber skull dug gery in last year’ se­lec­tion, Mr. Ryan re­minded us that Congress was also fo­cused on the is­sues that mat­ter most to a ma­jor­ity of Amer­i­cans: the econ­omy, jobs and in­comes.

In a hard-hit­ting, na­tion­ally tele­vised ad­dress to the Na­tional As­so­ci­a­tion of Man­u­fac­tur­ers on Tues­day, Mr. Ryan laid out the nuts and bolts de­tails in the Repub­li­cans’ am­bi­tious tax cut plan.

“First, we will elim­i­nate harm­ful, bur­den­some taxes, in­clud­ing the death tax and Al­ter­na­tive Min­i­mum Tax,” Mr. Ryan said.

Then, Repub­li­can law­mak­ers in­tend to “con­sol­i­date the ex­ist­ing seven [tax] brack­ets into three, dou­ble the stan­dard de­duc­tion, and sim­plify things to the point that you can do your taxes on a form the size of a post­card,” he said.

And to in­sure these tax cuts are paid for in or­der to pro­duce a “rev­enue neu­tral” tax re­form pack­age, “clear out spe­cial in­ter­est carve outs and ex­ces­sive de­duc­tions,” and other need­less tax breaks known as “cor­po­rate wel­fare.”

But with­out touch­ing de­duc­tions for home own­er­ship, char­i­ta­ble giv­ing, and re­tire­ment sav­ings.

“And fi­nally — and most im­por­tantly — we will use the sav­ings from elim­i­nat­ing these loop­holes to lower tax rates,” Mr. Ryan ex­plained.

What this is all about is “jobs, jobs, jobs. Good, high­pay­ing jobs,” the Wis­con­sin law­maker said.

Af­ter ex­am­in­ing the Repub­li­can tax plan, the non­par­ti­san Tax Foun­da­tion es­ti­mated that “our blue­print would cre­ate 1.7 mil­lion new full-time jobs,” he said.

Busi­ness tax rates will be cut, too, but Mr. Ryan went to great lengths to ex­plain that the peo­ple who would most ben­e­fit from this are mostly or­di­nary, in­di­vid­ual tax­pay­ers.

“Most peo­ple do not re­al­ize this, but here in Amer­ica, 8 out of 10 busi­nesses file their taxes as in­di­vid­u­als. In fact, most of our jobs come from these new and small busi­nesses,” he said.

But “un­der our crazy sys­tem, suc­cess­ful small busi­nesses pay a top mar­ginal tax rate of 44.6 per­cent,” a puni­tive levy that robs sin­gle owner firms of the cap­i­tal it needs to ex­pand, hire more work­ers and raise salaries.

Mean­time, the U.S. cor­po­rate tax rate is 35 per­cent, when the av­er­age rate in the in­dus­tri­al­ized world is 22.5 per­cent. “How can we com­pete like that?” Mr. Ryan asked. “We can’t.”

Lit­tle won­der, then, that the U.S. tax code is send­ing U.S. man­u­fac­tur­ing op­er­a­tions over­seas where the tax rates are less. “This makes no sense, and it is cost­ing us jobs.”

Another part of the GOP’s tax re­form plan would bring money earned abroad back to the U.S. to be in­vested here.

Un­der our present tax sys­tem, when U.S. firms earn money over­seas, it is taxed in that coun­try. But it the firm brings that cap­i­tal home, it will be taxed again here.

“Al­most no other coun­try does this,” Mr. Ryan says. “It is lit­er­ally strand­ing tril­lions of dol­lars that could come into our econ­omy. We have to fix this. And we will.”

But the ques­tion that looms large in Congress is when? A num­ber of mad­den­ing fac­tors have col­lab­o­rated to block ac­tion on tax re­form.

Health care re­form has dom­i­nated Congress’ at­ten­tion for the past five months, along with an un­end­ing num­ber of high level hear­ings into the Rus­sian med­dling scandal that has left lit­tle room in the con­gres­sional cal­en­dar.

To say that Pres­i­dent Trump has been dis­tracted by the spe­cial coun­sel’s in­ves­ti­ga­tion into his role in the widen­ing in­ves­ti­ga­tion is putting it mildly.

In 1981, when Pres­i­dent Rea­gan was lob­by­ing for his across the board in­come tax cuts in the Demo­crati­crun House, to end Jimmy Carter’s re­ces­sion, he cam­paigned from one end of the coun­try to the other, ask­ing Amer­i­cans to write their law­mak­ers to pass his eco­nomic pro­gram.

Let­ters poured into Congress fa­vor­ing the tax cuts, and Democrats like Texas Rep. Phil Gramm were help­ing the White House. In the end, Demo­cratic House Speaker Tip O’Neill threw up his hands and sur­ren­dered.

But Mr. Trump, pre­oc­cu­pied by his own trou­bles and sharply de­clin­ing poll num­bers, has done rel­a­tively lit­tle to help Ryan pass the GOP’s tax plan.

Repub­li­can lead­ers in­sist that it will pass later this year, but others are not so sure.

There “is no guar­an­tee that the tax re­form will get done this year, as Ryan promised,” the Busi­ness In­sider web­site re­ported this week, “and many an­a­lysts re­main skep­ti­cal.”

Un­der our crazy sys­tem, suc­cess­ful small busi­nesses pay a top mar­ginal tax rate of 44.6 per­cent, a puni­tive levy that robs sin­gle owner firms of the cap­i­tal it needs to ex­pand, hire more work­ers and raise salaries.

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