Opposing view: Add more reforms to the nation’s tax code

Last year’s tax law was the most important thing policymakers did to unleash economic growth. Without that growth, every fiscal decision confronting Washington is more difficult. Making lower, simpler taxes permanent, as Tax Reform 2.0 would do, creates more opportunities for all Americans.

The Tax Cuts and Jobs Act brought relief to 90 percent of wage earners, millions of small businesses, and customers of more than 100 utilities, to give a few examples. The economy grew faster in the last quarter than it has in years. But as the Tax Foundation projects, we would see 1.5 million jobs above and beyond those created by the 2017 tax cut law if the reform were made permanent.

Other changes, such as the proposal to eliminate taxes on inflation-induced phantom investment gains, would be helpful for retirees at a modest budgetary cost. A Tax Reform 2.0 package would help families save more for retirement, invest more in education, and give startup businesses more access to capital.

The federal debt is a major burden, but overspending is to blame. The Congressional Budget Office estimates that revenue under last year’s tax law will average 17.5 percent of gross domestic product, historically in line with the 17.4 percent average since 1980.

If the law were to expire after 2025, entitlement-driven spending would still rise about 50 percent faster than revenue during the next decade, and effective tax rates for wages on middleclass Americans would increase more than they would for the wealthy. Fixing the debt without fixing unsustainable spending would be a regressive tax hike on the middle class.

President John F. Kennedy said it best: “An economy hampered by restrictive tax rates will never produce enough revenues to balance our budget.” Locking in the tax law’s economic prosperity, while adding modest reforms, is key to the political feasibility of tackling the unaffordable programs that are driving the debt problems of America.