Tax overhaul demands a full and open debate
Republicans in Washington are going full speed ahead on tax reform legislation. President Trump, in a column for USA TODAY this week, said his administration’s plan would “ignite America’s middle-class miracle once again.” House Speaker Paul Ryan says the bill should be on Trump’s desk by year’s end.
There’s just one problem: At the moment, no such tax reform bill exists. House Republicans plan to introduce one on Wednesday, then push it through in a couple of weeks with minimal effort to attract Democratic support.
By comparison, the last major overhaul, in 1986, took more than a year from the point an actual bill was presented to the public. Ultimately, Congress passed the measure with large and bipartisan margins. In the House, 176 Democrats and 116 Republicans joined to form a 292-136 vote. In the Senate, the vote was 74-23, with 41 Republicans and 33 Democrats voting in favor.
This time around, in the absence of actual legislation, for the past several months Republicans have been, in effect, urging swift action on ... a nine-page “framework.”
This outline calls for reducing the corporate income tax rate from 35% to 20%, while lowering and consolidating the number of individual rates from seven to three. It would also eliminate the inheritance tax and create a new
25% tax rate for the owners of “pass-through” businesses.
But plenty of crucial details are yet to be fleshed out. Among them: Where would the new individual tax brackets begin and end? What tax breaks in both the individual and corporate code would be eliminated or curtailed? In particular, would the rules for
401(k) savings be altered, and would the deduction for state and local taxes survive? Would people lucky enough to inherit multimillion dollar estates at least have to pay capital gains taxes?
Without these details, it’s hard to have any kind of meaningful debate on the pros and cons of making significant changes to the tax code.
Instead, key Republicans and Trump administration officials have been shopping around ideas behind closed doors. On something as important as taxes, closed-door negotiations followed by an extremely truncated public debate is no way to proceed.
To be sure, the longer that controversial tax changes are exposed to sunlight, the more chance they’ll be picked apart by special interests. Even so, the secrecy with which ideas are being considered shows the lack of mandate that Trump and fellow Republicans have in getting them through Congress.
One potential danger is that lawmakers will adopt tax cuts tilted toward the wealthy that add $1.5 trillion to the national debt over 10 years — the maximum amount allowed in a budget resolution that narrowly cleared the House on Thursday — without doing much to clean up the absurdly complex tax code.
The tax code and tax rates are serious matters that impact the economy and affect everyday lives. An overhaul is badly needed. But it deserves to be debated thoroughly and publicly, not rammed through on a partisan basis amid a frenzy of secretive lobbying and deal making.