The left is right to fear Trump’s tax cuts

Noth­ing fore­stalls cus­tom­ary midterm losses like an eco­nomic boom

The Washington Times Daily - - OPINION - By J.T. Young J.T. Young served un­der Pres­i­dent Ge­orge W. Bush as the di­rec­tor of com­mu­ni­ca­tions in the Of­fice of Man­age­ment and Bud­get and as deputy as­sis­tant sec­re­tary of leg­isla­tive af­fairs for tax and bud­get at the Trea­sury De­part­ment.

Lib­er­als fear Pres­i­dent Trump’s tax cuts more than any of his poli­cies. This ex­plains the left’s vir­u­lent op­po­si­tion and that it will only in­crease as tax cuts ap­proach en­act­ment. The rea­son: Tax cuts of­fer Mr. Trump and Repub­li­cans greater po­lit­i­cal and eco­nomic po­ten­tial than any other pro­posal.

Even be­fore con­gres­sional Repub­li­cans gained pro­ce­dural pro­tec­tions to ex­pe­dite tax cuts, lib­er­als were ra­bidly at­tack­ing an as-yet un­veiled pro­posal. Not even Repub­li­cans’ months-long tar­get­ing of Oba­macare elicited such re­ac­tion. While the at­tacks have many facets, their mo­ti­va­tion is that tax cuts threaten lib­eral pri­or­i­ties now and over an ex­tended time.

Lib­er­als saw Mr. Trump as il­le­git­i­mate even be­fore his vic­tory. His up­set and re­sult­ing pres­i­dency last Novem­ber only com­pound their per­cep­tion. They glee­fully fore­see Mr. Trump in dan­ger and Repub­li­cans en­dan­gered. His mi­nor­ity vic­tory, low poll num­bers and scarce ac­com­plish­ments — all ac­com­pa­nied by main­stream me­dia’s neg­a­tive drum­beat — make him a prime tar­get for midterm de­feat lib­er­als re­mem­ber all too well.

The last two Demo­cratic pres­i­dents suf­fered hor­ren­dous losses in their first midterms. Bill Clin­ton lost both House and Se­nate, and Barack Obama the House — de­spite hav­ing held large ma­jori­ties. Lib­er­als want and need their pay­back, in­flict­ing a siz­able con­gres­sional de­feat on Mr. Trump and Repub­li­cans. How­ever, they fear tax cuts give Repub­li­cans a roadmap to cir­cum­vent­ing midterm de­feat.

Tax cut en­act­ment would im­me­di­ately be a ma­jor ac­com­plish­ment en­er­giz­ing — and pos­si­bly uni­fy­ing — a Repub­li­can base still not fully united be­hind the pres­i­dent.

Tax cuts would of­fer Mr. Trump and Repub­li­cans a quick gain po­lit­i­cally. It will be a ma­jor ac­com­plish­ment by any def­i­ni­tion — and one sorely needed in a cru­cial first year oth­er­wise largely de­void of suc­cess. En­act­ing them now would not sim­ply en­er­gize Repub­li­cans, it could unite them.

Cut­ting taxes in gen­eral is the right’s fa­vorite pol­icy, and tax re­form in par­tic­u­lar has been their holy grail since Ron­ald Rea­gan’s in 1986. Mr. Trump has never headed a uni­fied party, yet he still won last Novem­ber. How much bet­ter would his prospects be in 2018 and 2020 were this to hap­pen? The po­lit­i­cal wind­fall to which lib­er­als feel en­ti­tled could van­ish be­fore their eyes.

To un­der­stand why po­lit­i­cal im­pact of tax cuts could ex­tend past next Novem­ber, look at their po­ten­tial eco­nomic ef­fect. Lib­er­als know the power of the econ­omy on pol­i­tics; they need only look back to Bill Clin­ton to re­mem­ber it.

Mr. Clin­ton had many of Mr. Trump’s li­a­bil­i­ties. Mr. Clin­ton was elected by an even smaller per­cent­age of the pop­u­lar vote, he failed in his at­tempt at ma­jor health care leg­is­la­tion (with even a big­ger role in it), had heavy po­lit­i­cal bag­gage, and a White House plagued by mis­cues and poor press. Yet the econ­omy saved Mr. Clin­ton, send­ing him to re-elec­tion.

If the econ­omy could save Mr. Clin­ton, why would it not also save Mr. Trump to­day with ar­guably fewer prob­lems? Mr. Trump does not just have a bet­ter po­lit­i­cal launch­ing pad for a re­cov­ery than Mr. Clin­ton did, but a bet­ter eco­nomic one, too. The econ­omy has un­der­per­formed for eight years with av­er­age real gross do­mes­tic prod­uct (GDP) growth of just 1.5 per­cent (ver­sus 3.1 per­cent from 1946-2007). Even a sus­tained, mod­er­ate re­bound will look dra­mat­i­cally bet­ter in com­par­i­son for Mr. Trump.

Lib­er­als’ per­cep­tion of the econ­omy is that Ge­orge W. Bush wrecked it, Barack Obama fixed it, and Don­ald Trump in­her­ited it. While they will never ad­mit that tax cuts will have fixed the econ­omy, they rec­og­nize that the na­tion would reach that con­clu­sion. It would gall them to no end to be­lieve Mr. Trump not only waltzed into the re­cov­ery they waited eight years in vain for, but that he would get credit for it.

The com­bined po­lit­i­cal and eco­nomic im­pact of tax cuts could ex­tend well be­yond 2020, too. Lib­er­als’ big­gest threat is the longer-term eco­nomic one. Imag­ine the econ­omy en­ter­ing a sus­tained pe­riod of strong growth. Last quar­ter real GDP came in with a 3 per­cent growth rate. What if in­stead of be­ing a re­cent aber­ra­tion, this be­came again the norm?

Mr. Trump and Repub­li­cans get credit for it, and tax cuts would shift from a tenet of Repub­li­can or­tho­doxy to main­stream mantra. As bad as a twoterm Don­ald Trump would be for the left, a gen­er­a­tional shift to­ward Repub­li­cans’ pre­ferred pol­icy pre­scrip­tion of low taxes would be far worse.

The left knows that tax cuts rep­re­sent an un­prece­dented and mul­ti­fac­eted threat. Lib­eral at­tacks on tax cuts are not about to stop. In­stead, they will in­ten­sify the closer tax cuts move to­ward real­ity. More clearly than Repub­li­cans them­selves may re­al­ize, the left see the unique op­por­tu­nity tax re­form has to re­shape this ad­min­is­tra­tion po­lit­i­cally and eco­nom­i­cally over the near and the long-term.


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