Cut the worst ex­cesses from tax leg­is­la­tion

Woonsocket Call - - Opinion -

This edi­to­rial ap­peared in Tues­day's Wash­ing­ton Post:

Both Houses of Congress have now passed tax bills, and GOP law­mak­ers will over the next cou­ple of weeks try to rec­on­cile the two ver­sions. Nei­ther is an im­prove­ment over the sta­tus quo, and we'd be de­lighted if the con­fer­ence col­lapsed and ev­ery­one agreed to start from scratch to craft a bi­par­ti­san, fis­cally re­spon­si­ble bill. Still, that's not likely — and there are worse and worser pos­si­ble out­comes from a con­fer­ence agree­ment.

The first step to a less-bad agree­ment would be to ex­cise ex­tra­ne­ous pro­vi­sions tacked onto one bill or the other in or­der to pay off a par­tic­u­lar law­maker or to sat­isfy nar­row ide­o­log­i­cal pre­oc­cu­pa­tions. The Se­nate bill elim­i­nates Oba­macare's in­di­vid­ual man­date, a big step to­ward re­peal­ing Oba­macare with­out any suf­fi­cient re­place­ment pol­icy in­cluded or promised, and it al­lows drilling in the pre­cious Arc­tic Na­tional Wildlife Refuge. These should go. The House bill would open a gi­gan­tic cam­paign-cash loop­hole that in the name of "re­li­gious freedom" would en­able peo­ple to fun­nel vast amounts of dark money into pol­i­tics and claim a tax de­duc­tion for it. Strike that, too.

Next, bi­cam­eral ne­go­tia­tors should re­duce the im­pact on the debt by scal­ing back the most un­jus­ti­fi­able give­aways to the wealthy. Rather than low­er­ing the top in­di­vid­ual in­come tax rate, they should agree to keep it at 39.6 per­cent, as the House bill would. Rather than ac­cept­ing the House pro­posal to elim­i­nate the es­tate tax, which ap­plies only to very wealthy heirs, they should keep it as is — or, if they must help the idle rich, adopt the Se­nate's idea to pare it back tem­po­rar­ily. They should ac­cept the Se­nate's plan to main­tain the in­di­vid­ual al­ter­na­tive min­i­mum tax, which en­sures that wealthy wage earn­ers can­not use loop­holes to en­tirely es­cape pay­ing a fair share.

Ne­go­tia­tors should take up Pres­i­dent Don­ald Trump on his will­ing­ness to drop the 35 per­cent cor­po­rate tax rate to 22 per­cent, rather than the 20 per­cent each bill cur­rently pre­scribes. In­stead of spend­ing the ex­tra cash, they should use the savings to limit the dam­age GOP tax cuts would do to the na­tion's already stretched bud­get.

Fi­nally, ne­go­tia­tors should soften their bla­tant at­tacks on Demo­cratic states and other con­stituen­cies Repub­li­cans have sin­gled out for pun­ish­ment. In­stead of chop­ping away at the de­duc­tion for state and local taxes, which would tar­get tax­pay­ers in blue states, they should re­duce tax breaks in a fairer way, per­haps by fur­ther lim­it­ing the home mort­gage de­duc­tion. The House bill, for ex­am­ple, would cap the ap­pli­ca­bil­ity of the mort­gage de­duc­tion at $500,000 in loans. And ne­go­tia­tors should drop all of the pro­vi­sions in each bill that would slam uni­ver­si­ties and their stu­dents. These pro­vi­sions raise lit­tle money, serv­ing pri­mar­ily as short­sighted leg­isla­tive as­saults on the coun­try's cru­cial in­sti­tu­tions of learn­ing and in­no­va­tion.

Even if House-Se­nate ne­go­tia­tors took all of these rec­om­men­da­tions, the prod­uct would still be an ex­pen­sive tax cut bill a coun­try in the midst of an ac­cel­er­at­ing eco­nomic re­cov­ery does not need and can­not af­ford. But the con­se­quences would be less ex­treme.

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