Since his inauguration, President Donald Trump has faced the stark reality that getting others in government to go along with your agenda is no easy task. Judges have slowed the president’s efforts to impose “extreme vetting” on refugees coming in from seven countries with a known history of terrorism, and Congress has been unable to reach an agreement on repealing Obamacare. But the golden goose of the president’s agenda is tax reform, and, if history is any guide, this won’t be an easy task.
During the campaign, then-candidate Trump made a compelling case that America’s complex tax system is out-of-date and anti-competitive. He proposed reforms that would simplify the tax code, reduce taxes on taxpayers and businesses, and change provisions to make America more competitive globally.
Congress is now poised to undertake the grueling task. It is critical that Congress not get hung up on the “pay-fors” of the tax cuts. “Pay-fors” are Washington-speak for robbing Peter to pay Paul. Typically, when Congress tries to reduce taxes on one group, it will “pay for” those taxes by raising taxes on someone else. This is a formula for disaster.
The tax code is replete with instances where Congress used the “pay-for” shell game. During consideration of Obamacare, some of the costs of the legislation were offset with new taxes on tanning salons, medical devices and union health care plans. The results were more than predictable. It is estimated that the “tanning tax” forced the closure of nearly 10,000…
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