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Americans like the idea of tax cuts for all...to a point

Americans like the idea of tax cuts for all...to a point”

President Donald Trump will promote his plan for a sweeping rewrite of the tax code to an audience eager for the proposed change. But it is just an outline.

Trump talked up the tax proposal during a speech on Friday to the National Association of Manufacturers business lobbying group in Washington, calling it "a giant, beautiful, massive - the biggest ever in our country - tax cut". Loophole closing is not a primary concern.

The Maine senator has voted for numerous tax cuts in the past, including the Bush tax cuts of 2001 and 2003. They want to get it done by the end of this year. You need another dose of the drug or you keep doing the same thing. "By simplifying and flattening the tax code and lowering the tax rates on businesses, millions of new, high-quality jobs would be created, benefitting everyone in society". And now he's staking out a far-reaching position on taxes, too, calling for a "large cut of at least 15 percent for every taxpayer" in an August 30 op-ed. For businesses, loopholes would be closed so no matter what the industry or source of income or costs, all firms are taxed the same.

Trump has signaled that his administration would take other action to unwind the law, and on Wednesday said he would sign an order next week allowing people to buy insurance coverage across US state lines. Initial reaction among Democrats to the tax framework indicates firm opposition, but McCain was more positive, praising the multiple tax hearings that the Finance Committee has held and saying he looks forward to reviewing the proposal. The exact number might be higher or lower, but what's more important is the scale. And investors should invest in firms that grow faster, not those that profit from tax gimmicks.

First, it means that Congress should focus on the special tax breaks, not on the rates.

"We need a tax system that encourages companies to stay in America", he added.

And about 12 percent of taxpayers would face a tax increase next year, of $1,800 on average.

Reforming this monstrosity, however, will not be easy.

The debate over the budget deficit and "fiscal responsibility" runs like clockwork: when there's a Democratic president, Republicans pretend to care about balancing the budget; and when there's a Republican president, the GOP drops the pretense.

Understand this: There is essentially no evidence that tax cuts pay for themselves.

A fight over the state-and-local-tax deduction is the largest of dozens of small battles that could ensue over the tax incentives that litter the existing code and must be stripped out if lawmakers hope to pass an aggregate $5 trillion rate reduction under a budget allowing for only $1.5 trillion in lost revenue.

When Barack Obama was president, congressional Republicans were deficit hawks. They can accept rising deficits (doubtful). They can reduce the amount by which they chop tax rates or close more loopholes to cancel out the cuts. That is already happening. "The question is, will we have the political will to do it?"

Finally, the issues of economic impacts and fairness will be raised.

The deduction benefits individuals who live in high-tax areas, including many in the Northeast corridor.

GOP leaders were able to do that thanks in part to big-spending allies such as the Senate Leadership Fund, which spent $114 million in the 2016 election cycle, according to the nonpartisan Center for Responsive Politics. Tax incentives through mortgage-interest deductions will remain in place, allowing taxpayers to purchase more house than they can afford by writing off those deductions.

And that's why tax reform is hard. Although they can boost growth sometimes, even in the most favorable circumstances, the growth effects are smaller than the total tax cut.



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