The promised Republican tax cuts are losing the battle with welfare/warfare state realities.
Voters have been waiting for years for Republican tax cuts. Those promises were a major reason voters gave resounding victories to the GOP in 2010, 2014, and 2016. The last election demonstrated that there is major unrest among Republican voters and many others. In both the Republican primaries and the national election, voters tossed out the status quo.
Republicans in Congress should have realized that they need to toss out the status quo. But instead, the Republican tax cuts are being choked off. Thus, the Wall Street Journal headline, “GOP’s Proposed Tax Changes Are No Match for Status Quo.”
There’s a clear winner in this year’s tax policy debate so far: The status quo.
Republicans are scouring the tax code, searching for breaks to offset the deep rate cuts they desire. But the biggest tax breaks are surviving and the boldest ideas for change are on political life support or already dead.
Republican proposals for border-adjusting the corporate tax, ending the business interest deduction and making major changes to individual tax breaks for health and retirement all hit resistance within the GOP. The only big revenue-raising provision with anything close to Republican consensus is repealing the deduction for state and local taxes, and that faces objections from blue-state lawmakers in the party.
The GOP’s dreams have collided with interest-group lobbying and the tax system’s reality. Politicians all profess to hate the tax code, but they don’t agree on exactly what they hate. Voters gripe about complexity but are wary of losing cherished breaks that are woven into the economy.
Reading this analysis, it makes clear that President Donald Trump is right to propose spending cuts. In fact, he probably needs to cut more. But Republicans and Democrats are both opposing him.
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