Before the House and Senate each released the “Tax Cuts and Jobs Act,” President Trump called his version the “Cut, Cut, Cut” plan. Although some aspects of the tax reform plan that is winding through Congress today are not as bold as candidate Trump proposed, Congress is expected to pass a bill that will provide pro-growth reforms. When the president signs tax reform he will be completing yet another Trump campaign promise.
Creating jobs by shrinking government taxation is one big reason why the American people elected Donald J. Trump as president. The idea of making America great again includes convincing American companies to come back home and hire in the United States. Insourcing of jobs and increasing wages are a centerpiece of the Trump plan through a reduction in corporate taxes, repatriating cash from American companies that has migrated overseas and providing incentives for American companies to hire American workers.
{mosads}The only obstacle to more jobs for Americans and massive economic growth are the sour grapes Democrat politicians in the House and Senate who are unified in opposition to Trump’s tax cut plan. If successful, the Democrats will have sabotaged the Trump recovery economy in a way that keeps taxes high on taxpayers and businesses in a way that will crash the economy for the purposes of a hostile left-wing takeover of the Congress.
Tax cuts and tax reform are yet another set of promises kept by President Trump. When candidate Trump spoke to the Detroit Economic Club on August 8, 2016, he explained the difference between Democrats and Republicans on taxes when he described “Hillary Clinton – who has spent her career voting for tax increases – plans another massive job-killing $1.3 trillion-dollar tax increase. … Her plan would tax many small businesses by almost 50 percent.” Democrat opposition to tax cuts is rooted in their idea that the government needs more money to grow even bigger. They love government more than the taxpayer.
Trump had a different vision and we are seeing the promise of tax cuts bearing fruit today. Trump promised the American people that “these reforms will look for the biggest tax revolution since the Reagan Tax Reform, which unleashed years of continued economic growth and job creation” and he further promised “we will Make America Grow Again.” The Trump economy is booming partially because of the promise of a corporate tax cut. Even CNN has to admit the statistical evidence of growth from August, including that the 4.3 percent unemployment rate is a 16-year low, the trade deficit is shrinking, consumer confidence is high red hot rate of home (and car) loans, and the Dow keeps setting records.
House Ways and Means Chairman Kevin Brady (R-Texas) has produced an excellent starting point for negotiations. Some of the moderate Republicans were a bit too meek when they agreed to cap the tax cuts at $1.5 trillion and that has caused some horse trading on tax cuts resulting in some hidden tax hikes. One odd provision in the tax bill imposes retroactive taxation on something called “nonqualified deferred compensation plans” and another provision, spotted by the Club for Growth and the Wall Street Journal, creates a “bubble” that will result in a 45.6 percent marginal tax rate on earnings between $1.2 and $1.6 million.
Lawrence Kudlow, an economist who helped draft the Trump tax plan, argues “the Senate’s idea to phase in the new corporate tax rate in 2019 is a bad idea.” Compromise is possible and a few fixes to the plan to eliminate provisions that slow the economy should be made to make the plan even more pro-growth.
The Congress has shown a capacity to negotiate some changes to the tax plan as Rep. Brady did on the issue of “carried interest” where his committee agreed to not raise taxes by forcing investors to hold their investments for three years rather than one. The mortgage interest deduction has also been the subject of negotiations and the Senate has responded to concerns from the National Association of Realtors and Home Builders to increase, from the House plan, the tax deduction on interest that home mortgage borrowers can claim. Hopefully, other changes will be made that will help unify support for the plan.
This Congress really needs to pass tax reform plan before the end of the year. Leaders in Congress are in need of one solid legislative accomplishment to bring back to the voters to show that they can keep their promises – like President Trump. If Congress fails to pass this pro-growth tax reform bill, they will be sending a message to the voters that they are incapable of delivering legislative victories and they will pay a price at the ballot box next fall.
Corey Lewandowski served as a campaign manager to Donald J. Trump, the 45th president of the United States. He is senior advisor and a spokesman for America First Action. Follow him on Twitter @CLewandowski_.