There’s much to like about President Trump’s tax plan, including the fact that he’s going back to his campaign promises to do something big and beautiful — not build a wall, but slash rates Ronald Reagan-style for both individuals and corporations.
That will take an economy that even in its best quarters is growing well below average and transform it into something that will create jobs and decent wages — which the American people haven’t seen in about a decade.
That’s the good news, but there will be plenty of bad news in the days and weeks ahead, as business interest groups lobby Congress to keep their loopholes, Democrats argue that the White House and Republicans are throwing money at the rich — and more than a few Republicans demand that the whole thing not add a cent to the budget deficit, even if the evidence of the Reagan years is that lowering taxes on people and businesses can grow tax revenues and, with some budget restraint, pay for itself.
The question is: Does the Trump White House — a warring mix of ideological nationalists, moderate Democrats and a smattering of establishment types lead by a political neophyte as president — have the intestinal fortitude to ignore the noise and make the pro-growth sale to the American people?
Wednesday’s unveiling of the plan by Gary Cohn, the head of the White House’s national economic council, and Treasury Secretary Steve Mnuchin, offered a pretty good start.
Mnuchin and Cohn billed the tax cuts as the biggest in US history. If the White House and the GOP Congress don’t chicken out, that’s probably right. The US corporate tax rate is among the highest in the world at 35 percent; it would shrink to a super competitive 15 percent, meaning business could repatriate their corporate headquarters, and of course, jobs from countries like Ireland back to the US.
The plan cuts individual tax rates as well, reducing seven brackets to three. The top rate falls to 35 percent from nearly 40 percent. The lowest rate starts at 10 percent.
In other words, the federal government would be finally giving people an economic incentive to work more and harder to make more money because they won’t be handing their excess earnings back to the welfare state. That’s a pretty simple concept that went lost on the Obama economic team during their eight years.
Cohn was an odd guy to be making a supply-side case for lowering taxes (namely that it creates jobs and economic growth that will reduce deficits in the future), since during his long years as a top executive at Goldman Sachs he was one of Wall Street’s most prominent Democrats.
Maybe Gary saw religion during the economic disaster of the slow-growth, falling-wages Obama years. Or maybe his boss, who himself once touted more progressive economic theories, has impressed upon him the obvious economic benefit to letting individuals and businesses keep more of their own money.
Either way, Cohn made a strong and (at least to me)…