With every indication that the Senate has the requisite votes to pass the tax plan, as Caleb Howe reported earlier, it’s looking increasingly likely that a tax reform bill will be on the President’s desk before Christmas. Not everyone views it as a gift, of course, but the bill has its proponents from several different quarters.
Last night, I had the opportunity to attend a Tax Relief event sponsored by our local conservative talk radio station, 97.1FMTalk. The event was emceed by the station’s morning drive host, Jamie Allman, and featured David McIntosh from the Club for Growth, Brenda Talent from Missouri’s Show-Me Institute, and Adam Michel from The Heritage Foundation.
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The panel did a nice job of hitting the highlights, emphasizing the pros and cons, and answering some fairly pointed questions from an audience which, while clearly supportive of tax reform, was understandably skeptical of the plan. One of the most salient points they made was that economic growth is key to reform — and this is very much a pro-growth plan.
Brenda Talent, CEO of the Show-Me Institute, emphasized core principles, such as:
- Income belongs to the person who earned it;
- Taxes affect behavior; and
- Taxes should be fair, low, simple, and predictable.
Talent noted the growth which has already been generated compliments of regulatory relief under the Trump administration, inviting the audience to imagine what tax reform on top of that will generate. She also held up Tennessee, a state with no income tax, as a comparison to Missouri, noting their respective GDP growth over the past few years has run counter to their level of taxation.
Concerns were raised regarding the relative benefit of the proposed plan to “the little guy” versus large corporate interests. And the panel acknowledged that there is danger in leadership being so busy helping the politically connected that they’re forgetting the working people, though again, they emphasized the benefits of the growth aspect (combined with the doubled standard deduction.)
Club for Growth President David McIntosh also noted that experience tells us when you lower the corporate tax rate, wages go up. Thus, making the business environment more competitive is of benefit to workers across the economy.
Talk turned to some of the proposed provisions, including the “trigger” to automatically increase taxes if the reforms don’t generate the requisite growth — something which no one in the room appeared to support. Then came discussion as to why there is consideration for an automatic tax increase but none for a spending cut. (Or an automatic decrease in taxes should it generate even more growth than predicted.)
From the latest reports today, it appears the trigger may be out in exchange for some other provisions designed to blunt the deficit effects. Of course, if the predicted growth materializes, that should go a long way towards helping address the deficit concerns.
The Heritage Foundation’s Adam Michel also noted that, while the proposed plan doesn’t address all issues, we should look at this as a “first bite at the apple” — if the plan passes and has the desired effects, there is no reason additional reforms can’t be addressed down the line. (Obviously, this requires the GOP maintaining its majority — which is far more likely if they demonstrate to the voting public they’re capable of passing beneficial reforms.) And passage of tax reform doesn’t preclude addressing spending, but it is imperative to get the economy moving again – then address spending.
There were some (arguably) idealistic suggestions thrown out during the question and answer section. Getting rid of the income tax altogether met with a round of applause (and knowing nods that this isn’t likely to happen.) Removing the automatic withdrawal mechanism and requiring taxpayers to write quarterly checks was another suggestion. Restructuring the tax code so that everyone has “skin in the game” was also advocated (and applauded.)
This was an informative symposium. I wouldn’t say I’m 100% sold on the tax plan, but this definitely helped tip the scales in its favor in my mind. Will be interesting to see if the GOP can usher it across the finish line.