Let Freedom Ring Must Reads

Trump sets clock for tax reform with unexpected move
By Matt Mackowiak

September was supposed to be a brutal month.

The combination of the debt ceiling and the continuing resolution made it combustible, with the political reality that the party in power will be held responsible for keeping government open and functioning, particularly in the aftermath of a major natural disaster.

Republicans knew that Democratic votes would be necessary.

That turned out to be the understatement of the year.

President Trump stunning decision to side with Senate Minority Leader Charles E. Schumer, New York Democrat, and House Minority Leader Nancy Pelosi, California Democrat, over their Republican counterparts and Treasury Secretary Steven Mnuchin put an end to the suspense.

There would be no need for countdown clocks.

Whether Mr. Trump was being strategic (“clear the decks” for tax reform), moralistic (don’t risk Harvey aid and military pay with global threats) or vengeful (expressing frustration with the Republican Congress) is anyone’s guess.

It is likely a mix of all three motivations.

The net effect of this is that September is no longer consumed by that fight and can now be used to urgently advance tax reform.

The White House is doing its part, unveiling the most advanced coalition effort of surrogates, messaging and strategy that we have seen in their first eight months.

Cabinet secretaries are everywhere, meetings are happening all over town, allies and surrogates are being mobilized, everyone is on the same page about the job at hand.

Procedurally, Congress must first pass a budget resolution, which sets the specifics for using the procedural approach known as “reconciliation.” That procedure will make tax reform immune to a filibuster and allow its passage on a majority vote (50 votes are needed with the vice president breaking the tie). The downside is that reconciliation requires bills to not add to the deficit after a 10-year window, so the tax cuts would have to be temporary.

Winning eight Democratic votes in the Senate is impossible, so using reconciliation is the only realistic path to passing tax reform.

Now members of Congress eagerly await the final tax reform bill language, although the expectation is:

• The corporate rate will but cut to at least 20 percent and perhaps 15 percent

• Numerous deductions will be limited or eliminated (broadening the base and allowing for overall rate reductions) and cutting seven tax brackets to three

• The standard deduction will be doubled, to benefit middle-income families

• The tax code will be simplified, allowing for an individual’s taxes to be filled out on a postcard

• The rate of repatriated profits will be cut (one time), which could bring as much as $3 trillion in overseas profits brought back onshore and reinvested in the economy

The clock is ticking.

Congress has not passed major tax reform since 1986 and every single tax code provision was put in there at great expense and tremendous effort.

But Republicans are unified that this must get done, and if it the tax cuts are made retroactive (as Reagan’s tax cuts were in 1986), it will immediately benefit taxpayers and the economy.

The goal is to help the private sector grow and expand, to incentivize more hiring, to see wages rise, to make our country more globally competitive, and to foster in a period of sustained annual economic growth of at least 3 percent.

Health care divided Republicans; tax reform unites them.

The Trump White House, and millions of its supporters in the country, are deeply frustrated that after eight months, the Republican-controlled Congress has achieved little of real significance.

They now have three and a half months to do a year’s worth of work.

If Mr. Trump and Congress can agree on tax reform before year’s end, they will go into 2018 with new optimism and momentum after a difficult year.

Americans will benefit from a simpler, fairer tax code that allows individuals and companies to keep more of their own money.

This priority supersedes all others right now and there are no excuses.

• Matt Mackowiak is the president of Austin, Texas, and Washington, D.C.-based Potomac Strategy Group, a Republican consultant, a Bush administration veteran and former press secretary to two U.S. senators. His national politics podcast, “Mack on Politics,” is produced in partnership with The Washington Times and is on iTunes, Google Play, Stitcher and on MackOnPolitics.com.

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