We’ve got it, something splendid, the first major tax reform in decades.
This GOP congressional achievement will provide tax breaks to just about every Joe, Jane and business venture out there, and — this is the biggie — will almost surely foster significant economic growth.
And what might that growth foster? The list includes more jobs, higher wages, more financial security, a better quality of life, less income inequality as lower classes rise up, fewer social problems and a stronger, better America.
Naturally enough, Democrats are furious.
Especially given that not one voted for it, blessed consequences could hurt them politically, and their specialty, at any rate, is taking the freedom out of free enterprise to make more room for big government burdens. Their inevitable analysis, therefore, is that the whole thing is a fraud. It is the rich robbing the poor, especially in the case of corporations no longer having to pay the highest, most disabling corporate tax rate in the developed world.
With a snarl on his lips and fire in his eyes, Minority Leader Chuck Schumer (D.-N.Y) contends that such a decrease will simply mean more loot for such fat cats as CEOs whose salaries will swell. Our corporations have already been using loopholes to avoid the 35 percent rate now reduced to 21 percent, he says without understanding something important. Under the reform, many of those loopholes that are truly loopholes and not justified exemptions will now be saying goodbye.
What’s also important is that the corporate tax system will no longer be the mess sending thousands of U.S. companies abroad. Neither will it be announcing to potential foreign investors that they had better not invest here if they value their pocketbooks. Any number of analyses, some by top economists at prestigious universities, say the lower rate and other equally meaningful moves will likely lead to expansion, to investment, to enhanced prosperity for all.
Of course, the reform package includes far more than just corporate changes, and, in addition to such pluses as 80 percent of the population getting tax breaks in a system that will be actually be more progressive than before, there are flubs. Politics was not eradicated before passage, and the package is an imitation of Obamacare in trying to do too much all at once. The worst error is increasing an already horrific debt that needs addressing as a foremost domestic priority.
Even here, however, some critics misstate the situation. Yes, the bill will add $1.5 trillion to the $20 trillion debt over 10 years, and that’s a bunch, but keep the following in mind. In two terms, the Obama administration embraced legislation that added $5 trillion to the debt. The $1.5 trillion is a relatively small part of what the total debt growth will be. And even if the legislation were revenue neutral, the issue would still be huge, largely because of Democrats.
The truly crucial problems have to do with Social Security, Medicare and Medicaid. Their costs have been mushrooming to the point of economic crisis for years, and will get [terribly] worse as more baby boomers retire. Yet every time in the past when Republicans suggested reasonable adjustments inflicting no harm on current recipients or future recipients most needing the help, Democrats defeated their hopes by saying they would force people to suffer.
We can no longer pretend all is OK, and the real question is whether members of both parties will have the honesty and political courage to do what serves the nation instead of what serves their own futures. The likes of Sen. Bernie Sanders — someone who proposed a free college plan that could have cost $30 trillion — is already bemoaning the evil the GOP is prepared to commit.
So, congratulations to the GOP on the tax bill, and may bipartisan cooperation rise up to save us on the debt.