Pass GOP tax cuts by Thanksgiving

The specter of House Speaker Nancy Pelosi is looming. Following Republicans’ failure to fix health care, polls show Americans are increasingly flirting with Democratic governance in Congress. This means Republicans must change their game plan.

To regain their legislative momentum and keep their majority, Republicans must demonstrate they are fighting for the hardworking taxpayers. This means passing a major tax cut by Thanksgiving — and making it retroactive to the start of this year. By 2018, the tax cuts will have spurred economic growth and wage increases, giving Republicans substantial momentum and a popular record of success to tout during their campaigns.

But they must stay focused. A tax cut package directed at small businesses and the middle class is better policy than politics. According to the Federal Reserve’s latest annual economic well-being report, nearly half of Americans could not cover an unexpected $400 expense, like a car repair or medical bill.

A middle-class tax cut would boost bank accounts by providing Americans with more take-home pay. Small business tax cuts would help further. According to a new Job Creators Network poll of small business owners, a majority said they’d direct their tax savings into their businesses in the form of new jobs, higher wages or expansion.

This new economic activity would — along with other regulatory and pro-growth efforts — restore the country to its historic 3% growth rate. This would produce trillions of dollars in extra revenue that would offset the fiscal costs of the tax cuts.

The first step for Republicans writing the tax cut legislation is to reject the notion that it needs to be revenue neutral. Instead, Republicans should argue that the tax cuts should be deficit neutral — meaning they wouldn’t add to the deficit because of the economic growth they’d produce.

Deficit neutrality might ruffle the feathers of some fiscal hawks. But which will be more expensive, having House Speaker Nancy Pelosi attempt to implement a Democratic agenda, or passing a deficit-neutral tax cut ensuring that voters will view Republicans as the party of middle-class prosperity in November 2018?

Some in Congress want to pursue comprehensive tax reform. But Republicans don’t have time to pursue such massive and controversial reform. Tax cuts by November beat comprehensive reform next spring because changes will take time to take effect and for voters to feel the impact. A GOP majority can always come back to tax reform in 2019.

Serious tax cuts will bring Americans more — and better — job opportunities, with higher take-home pay. That’s why we think this is the key to keeping the Republican majority in 2018.

In short, Republican lawmakers must come together over tax cuts for hardworking taxpayers before hardworking taxpayers come together against Republican lawmakers.