- Jun 6, 2007
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President Trump with his deal with the Democrats made a colossal mistake which probably killed passage of the individual and corporate tax reform bill his Administration and the Republican Congressional leadership has been working on since he took office killed it anyway until after the 2018 mid-term elections. In order for a major bill like this to pass Congressional behavior like what appeared for passage of Medicare Part D back in the Bush Administration has to exist meaning that members of Congress coalesce around a bill and compelling passage momentum amongst members of Congress gets behind the bill. This bill will be controversial not one Democrat will support it because it gives a major tax cut to the wealthy and even amongst Republicans this carve out lower tax rate (like 15% to 25%) for business income for the "wealthy" sorry small business owners will be difficult to support because it makes these Republicans that have tight general election races vulnerable to attacks that their working for the wealthy not middle class American (even though giving a lower rate like 25% is probably great policy)!
This deal destroys the climate for passing such a bill in December which is exactly the time needed for a good climate (it passes around that time or it doesn't pass) because this bill is not passing deep into 2018 Republican members of Congress that have 2018 races are going to be too focused on winning those elections they're not voting for a super highly controversial bill deep into 2018. The December climate is going to be bad because with this Trump deal Congress will be pummeled with pressure on the budget Republicans if they are to have any credibility as financial stewards are going to have to make painful cuts not extreme but significant in non-military discretion spending and increase military spending to improve the military's readiness and maintenance status which is in an alarming bad status. The climate will be bad in December because members of Congress will know then they have a looming deadline to raise the debt ceiling and far right Republicans will not cooperate because they will want significant debt reduction which is not possible from a needed vote standpoint and Democrats will be tempted to extract some policy changes for their votes to raise the debt ceiling. The climate will be bad because at this time there will be huge pressure to pass a major Hurricane Harvey and Hurricane Irma infrastructure bill and the issue will exist how big to make it the tension being should the size be kept in the category of the Superstorm Sandy bill a fifty billion dollars range bill!
A prudent person would conclude that at this time the only path for Washington to pass significant tax reform bill prior to the 2018 mid-term elections is if Washington scraps trying to reform the individual tax code and selects to pursue a bipartisan effort to solely reform the corporate tax code using the normal committee process. The Democrats should agree to this because this is the only alternative out there at the present time to significantly improve the economy and most importantly increase wages which the American people desperately want; it will be too politically costly and risky for the Democrats to reject that offer. This past week on CNBC the former Treasury Secretary Jack Lew said that Washington could readily lower the corporate tax rate to twenty-eight percent by just closing loopholes and using no funny math and not increasing the deficit. Many Republicans would be popping champagne if the corporate tax rate could be lowered to twenty-five percent surely if the gap between some leaders of both parties is this close that gap could be bridged. The membership of both parties in Congress, the President and leadership in both parties should recognize that the patience of the American people with the dysfunction of Washington is not unlimited people taking to the streets like the American people see in other countries throughout the world is not unfathomable for the American people. The American people are smart they know if the constitution is changed to mandate term limits two for senators five for House members, members of Congress will have a greater commitment to putting the American people's interest above their own reelection interests; to mandate algorithims draw voting districts where districts have relatively even borders and symetrical shape instead of the party in power drawing districts to their own advantage members of Congress would better serve all Americans; to mandate giving/spending money in elections isn't free speech and can be fully regulated to make elections fair and stop turning America into a place where we have Uber citizens like Sheldon Adelson that have a dramatically greater influence in America's democracy compared to the ordinary citizen because of his wealth; and to mandate that all trade deals don't give away or impede the American's government authority to protect any and all industries in America from significant business, job and wage loss!
This deal destroys the climate for passing such a bill in December which is exactly the time needed for a good climate (it passes around that time or it doesn't pass) because this bill is not passing deep into 2018 Republican members of Congress that have 2018 races are going to be too focused on winning those elections they're not voting for a super highly controversial bill deep into 2018. The December climate is going to be bad because with this Trump deal Congress will be pummeled with pressure on the budget Republicans if they are to have any credibility as financial stewards are going to have to make painful cuts not extreme but significant in non-military discretion spending and increase military spending to improve the military's readiness and maintenance status which is in an alarming bad status. The climate will be bad in December because members of Congress will know then they have a looming deadline to raise the debt ceiling and far right Republicans will not cooperate because they will want significant debt reduction which is not possible from a needed vote standpoint and Democrats will be tempted to extract some policy changes for their votes to raise the debt ceiling. The climate will be bad because at this time there will be huge pressure to pass a major Hurricane Harvey and Hurricane Irma infrastructure bill and the issue will exist how big to make it the tension being should the size be kept in the category of the Superstorm Sandy bill a fifty billion dollars range bill!
A prudent person would conclude that at this time the only path for Washington to pass significant tax reform bill prior to the 2018 mid-term elections is if Washington scraps trying to reform the individual tax code and selects to pursue a bipartisan effort to solely reform the corporate tax code using the normal committee process. The Democrats should agree to this because this is the only alternative out there at the present time to significantly improve the economy and most importantly increase wages which the American people desperately want; it will be too politically costly and risky for the Democrats to reject that offer. This past week on CNBC the former Treasury Secretary Jack Lew said that Washington could readily lower the corporate tax rate to twenty-eight percent by just closing loopholes and using no funny math and not increasing the deficit. Many Republicans would be popping champagne if the corporate tax rate could be lowered to twenty-five percent surely if the gap between some leaders of both parties is this close that gap could be bridged. The membership of both parties in Congress, the President and leadership in both parties should recognize that the patience of the American people with the dysfunction of Washington is not unlimited people taking to the streets like the American people see in other countries throughout the world is not unfathomable for the American people. The American people are smart they know if the constitution is changed to mandate term limits two for senators five for House members, members of Congress will have a greater commitment to putting the American people's interest above their own reelection interests; to mandate algorithims draw voting districts where districts have relatively even borders and symetrical shape instead of the party in power drawing districts to their own advantage members of Congress would better serve all Americans; to mandate giving/spending money in elections isn't free speech and can be fully regulated to make elections fair and stop turning America into a place where we have Uber citizens like Sheldon Adelson that have a dramatically greater influence in America's democracy compared to the ordinary citizen because of his wealth; and to mandate that all trade deals don't give away or impede the American's government authority to protect any and all industries in America from significant business, job and wage loss!
