Michael Tanner realizes federal tax reform won’t be easy. He explains at National Review Online why it’s worth pursuing.
Republicans continue to disagree sharply over just what tax reform should accomplish — or even whether the priority should be cutting taxes or reforming the tax system. The usual formula for tax reform is to trade fewer deductions and loopholes, which often distort economic activity and benefit special interests, for lower rates. But that can create losers as well as winners. And therein lies the rub. …
… Some Republicans want to focus on cutting tax rates for business, which are an increasing burden on American competitiveness. Others from the pro-family wing of the party want a tax plan that benefits the middle class with a rate cut and/or an increase in the child tax credit, which would likely have less impact on economic growth. And President Trump continues to hint that he might support a rate increase for top earners, which might please Republican populists and win a couple of Democratic converts but would almost certainly cost the support of conservatives. Republicans still have just a two-vote margin in the Senate, meaning that they will have to find some way to keep all these competing factions — along with such habitual iconoclasts as McCain, Collins, Murkowski, Lee, and Cruz — happy. …
… None of this means that we don’t need tax reform. Our current tax system is uncompetitive and a burden to both business and individuals, slowing economic growth.
