Like much of the rhetoric from Campaigner Donald Trump, details on President Donald Trump’s tax plan are a bit sparse. The good news is that his tax plan does lean toward the supply-side principles on which he campaigned. And Mr. Trump’s ambitious but necessary economic course would help restore U.S. prosperity, writes the WSJ.
Many voters heard Mr. Trump’s make-America-great-again slogan as a promise to raise their incomes and improve economic opportunities after a long stagnation. Eight years of 2% growth since the recession ended in 2009 is the weakest recovery in the postwar era, and the result has been rising anxiety and diminished expectations for millions of Americans.
Why wouldn’t dramatically lower corporate-tax rates (U.S. the highest in the world) draw broad bipartisan support? “As a reform, corporate-tax cuts are far more likely to help workers than trade wars or minimum-wage hikes. It is hard to see why — beyond reflexive ‘resistance’ to Trump — anyone would oppose the idea,” explains Cato Institute’s Michael Tanner.
But oppose it they will. By both the Left and the balance-the-budget Right. Yes, without budget cuts or a tax increase (or a border tax), Trump’s plan could increase the deficit (debatable). However, as the WSJ points out, there are plenty of bargaining chips, which give Congress and the Trump administration a lot of opportunity to negotiate.
Perhaps the corporate rate will rise to 20%, or maybe the House will include a more modest border adjustment. Budget rules and Democratic opposition could force Republicans to limit the reform to 10 years. But better to start with a big pro-growth offer rather than preemptively lower aspirations.
Republicans, the WSJ reminds us, will not get another chance to reshape the tax code for a generation. Voters should be outraged if this is not a no (or little)-compromise, supply-side-oriented tax plan. Both sides’ entrenched party-line politicians have stonewalled American voters for decades. President Trump owes it to his supporters to produce a winner.