Tax Reform: ‘Just Do Something’

by Andrew Stuttaford

Politico:

Republicans also believe that the need for a big legislative accomplishment ahead of next year’s midterm elections will help sway any holdouts.

That rather assumes that the ‘accomplishment’ will be positive – and popular.

It’s less than clear that the GOP’s current proposals will satisfy either of those requirements.

Bloomberg:

One potentially significant complication is that senators haven’t yet received an official estimate about the larger effects that the package of tax cuts for businesses and individuals would have on the U.S. economy.

The Congressional Budget Office reported on Sunday that Congress’s chief scorekeeper for tax legislation hasn’t been able to provide a quick-turn “macroeconomic analysis” of the Senate tax bill.

The lack of any official finding complicates arguments by the legislation’s backers, who say its package of tax cuts — estimated to cost more than $1.4 trillion over a decade — would actually pay for itself over time by generating economic growth. As Senate leaders hasten to gather and hold 50 votes from their thin, 52-seat majority, some lawmakers have already expressed reservations about the deficit impact.

The absence of any official “dynamic score” also reflects the unusually rapid pace that GOP leaders have chosen in their push to approve the measure. If they vote Thursday, it will be just 11 days after the actual legislation first appeared — during a week when both chambers were on recess.

To push through changes on this scale without much of an idea what either the political or economic consequences will be (at best mixed, and certainly complicated, I reckon) seems to me to be unwise.

Act in haste, repent at leisure, as one version of the old saying goes.

But never mind that:

[I]n a year in which Republicans controlled both chambers of Congress and the White House, many party members have said there’s pressure to deliver on at least one major legislative achievement.

In other words, being seen to do something just this minute, straightaway, now, trumps (no pun intended) more careful consideration of what the Republicans are actually trying to ‘achieve’ with these changes.

As reminder, the 1986 Tax Reform Act took 2-3 years  to put together.

Some polling:

The Hill:

A Public Policy Polling poll, released by Businesses for Responsible Tax Reform, a group opposed to the GOP tax bills, finds 51 percent of small businesses are against the plan. About one-third, 34 percent, support the GOP tax plan.

Democratic pollsters, sure, but all the same….small businesses?

The Hill (my emphasis added):

According to the latest Harvard-Harris Poll survey, 54 percent say they oppose the Republican tax reform bill. The same amount — 54 percent — say the GOP plan is more likely to hurt them financially. Three-quarters of Republicans say it will help them financially, while 77 percent of Democrats and 56 percent of independents say it will hurt them.

CNBC:

Most American voters — 52 percent — disapprove of the GOP proposals to overhaul the tax system, according to a Quinnipiac University poll released Wednesday. Only 25 percent of respondents approve of the Republican effort.

Real Clear Politics:

In an NPR-Marist poll released Tuesday, just 62 percent of Republicans approved of the way their party is handling taxes, compared with 29 percent who disapproved.

Salon (yes, I know) cited work by Chris Warshaw, an assistant professor of political science at George Washington University, “show[ing] that the current Republican tax proposal is the second-most unpopular major piece of legislation in the past 30 years of public polling.”

Polls are flawed, polls vary wildly, and opinions change from day to day, but however you slice and dice those findings it seems that the GOP plans are less than beloved. Critically, they are also complex (which will make what emerges difficult to sell, and easy for opponents to knock). The final tax package will be voted through on a party-line basis. Put this all together and it is a combination that sounds a lot, politically, like Obamacare. As I recall, the 2010 Midterms didn’t go too well for the Democrats.

Now let’s scroll back to 1981, and Ronald Reagan’s tax plan.

Here’s the New York Times, April 25 1981:

Fifty-eight percent of those who had heard of Mr. Reagan’s proposals said they backed his proposed $48.6 billion in cuts in Federal spending. Fourteen percent said they favored some of the cuts and opposed others. Sixteen percent flatly opposed the reductions, while 12 percent of the 1,604 adults interviewed around the country by telephone April 13-14 were not sure.

In an A.P.-NBC News Poll conducted in late February, 61 percent favored the cuts and 13 percent opposed them. On Mr. Reagan’s proposed three-year tax cuts, 71 percent of those who had heard of the economic proposals favored the program and 15 percent opposed it. Fourteen percent were not sure. That is the same as found by the February poll.

That was then.

The Corner

The one and only.