When All Else Fails, Cut Taxes for the Rich
Doing big things is hard," said Speaker of the House Paul Ryan, after spending all of a couple of weeks trying and failing to remake the American health-care system. Had he known beforehand, he might have informed President Trump, who remarked before Ryan's bill went down to defeat that "nobody knew that health care could be so complicated." Armed with their newfound wisdom, Ryan, Trump, and the rest of the GOP are set to try again, only this time with a topic nearly as complex: the U.S. tax code. They're going to face some of the same problems, especially divisions among Republicans on what they should and shouldn't include in their legislation. But unlike with health care, there's a way out of those internal conflicts that every Republican will be able to live with, so long as they scale back their ambitions.
The first thing to understand is that there's a difference between "tax reform" and tax cuts. Tax cuts are relatively straightforward: Cut some rates, eliminate some specific taxes, and you're good to go. Tax reform is far more complicated, because it involves more fundamental changes to the way we generate revenue. Republicans would like to enact sweeping reforms that bring the entire system more in line with their vision of a country whose wealthy citizens and corporations no longer gasp for air as the taxman's boot presses so cruelly upon their necks.
But there are a number of reasons why it isn't going to be easy. The first is a bit of Senate arcana called the Byrd Rule, which in this case would require 60 votes for any bill that increased the deficit after ten years. To get around that requirement (so that they wouldn't need to obtain Democratic votes), Republicans could pass tax reform that sunsets after ten years. Which would, of course, be deeply unsatisfying. That's what they had to do when they passed George W. Bush's tax cuts, and although most of them ended up getting extended when they reached their expiration date, Barack Obama did manage to negotiate an increase for the wealthiest taxpayers as part of the "fiscal cliff" deal in 2013. Republicans certainly don't want a repeat of that.
But even more pressing, they don't actually agree on all the changes they'd like to make to the tax code. The border adjustment tax, for instance, is supported by Ryan and some others—it would provide a great deal of revenue by taxing imports, with the goal of boosting U.S. manufacturers. But there are powerful interests who find it abhorrent, like retailers who'd have to increase prices. Perhaps most importantly, the Koch brothers are mounting what The New York Times called "a furious campaign" against the tax, and in Republican politics, the Kochs usually get what they want.
http://prospect.org/article/when-all-else-fails-cut-taxes-rich
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