President Trump Must Take Charge on Tax Reform
September 1, 2017
If you thought the left weaponized class warfare rhetoric in the health care debate, just wait until tax reform is front and center. The fate of this reform will depend on President Trump’s leadership and GOP conviction.
The importance of Republican conviction goes without saying, right? Perhaps, but that doesn’t mean we need to just accept GOP fecklessness and incompetence and quit talking about it. Eventually, President Trump’s success and future GOP congressional majorities depend on whether Republicans really stand for their core values and the positions nominally affirmed in their platform. Reducing the tax burden on corporations and businesses is on any conservative’s shortlist.
Republicans need to think through this and decide what their goals are. Are they really about maximizing liberty, reducing government (taxes and regulations) and stimulating economic growth — and not just paying lip service?
The positive business atmosphere Trump’s victory ushered in and his market-friendly attitude have already yielded significantly positive results. We’ve just seen quarterly growth reach 3 percent. The stock market is thriving. Unemployment is down. Manufacturing is up. Overall, businesses are poised for growth.
Trump has done more than just champion business through his bully pulpit. He’s reduced onerous regulations, taken steps to loosen the left’s environmental straitjacket and issued orders to revive the Keystone XL and Dakota Access pipeline projects as part of a comprehensive rejection of Obama’s war on conventional energy.
But these advancements and numerous others will represent a hollow victory if pro-growth tax reform legislation isn’t passed in the near future.
Given guaranteed Democratic demagoguery and mainstream-media propaganda, President Trump and his rudderless Republican congressional majorities have their work cut out for them.
I believe that President Trump made a mistake in his handling of health care reform by not commandeering the leadership role. It wasn’t enough for him to say he would sign whatever bill the Republicans passed. He needed to embrace and articulate concrete and detailed policy objectives. For whatever reason, he didn’t clearly and forcefully present his policy goals, much less propose specific provisions to effectuate them. He can’t make that mistake with tax reform.
It’s true that bills originate and must be passed in Congress before they get to the president, but effective reforming presidents have historically led or co-led major pieces of legislation for which they have later been credited.
Just look at how instrumental President Obama was in passing Obamacare. Likewise, on major tax reform legislation, who can deny President John F. Kennedy’s pivotal role in passing marginal income tax cuts?
To be sure, Rep. Jack Kemp helped inspire the Reagan tax cuts, but President Reagan personally invested himself and his legacy in passage of his first major tax bill, which reduced marginal income tax rates by 25 percent across the board.
Reagan went over the heads of the liberal media and took his case to the American people. He had been a fierce advocate for personal liberty and the free market long before he took office, so he was particularly equipped to argue his case to the American jury.
Reagan didn’t approach the issue one-dimensionally. Yes, he explained that individual and corporate earnings were first the property of individuals and corporations and not the government — rejecting the liberal notion that all property is the government’s and the people are entitled to only what the leviathan, in its beneficence, allows them to retain. He also pleaded the tougher case that reductions in marginal rates spur economic growth by providing economic incentives and unleashing the power of the market.
President Reagan, certain congressional leaders and other thought leaders were intellectually grounded in every aspect of these issues and, just as importantly, truly believed in what they were selling. One of the most inspiring political books I’ve ever read was “An American Renaissance,” by Jack Kemp, who eloquently laid out the rudimentary concept that a rising tide lifts all boats. Contrary to the then-universally accepted Keynesian notion, Kemp argued we could enjoy economic growth without inflation. The late William F. Buckley was a great admirer of Kemp’s in those days and marveled at his contagious enthusiasm in presenting his ideas. Too bad we couldn’t bottle that up and use it now.
History vindicated Reagan and Kemp. We experienced unprecedented economic growth without inflation, and the plight of all income groups, from the lowest 20 percent of earners to the highest 20 percent, improved. President Clinton’s revisionism notwithstanding, the Reagan tax record is powerful and irrefutable. I am not denying that monetary policy was important, as well, but the tax cuts were paramount.
I would respectfully urge President Trump to approach tax reform wholly differently than he did with health care reform. I’d love it if he would read Kemp’s book, become a true believer — even more than he is now — and take the lead role in shaping and driving this legislation through Congress. If he doesn’t stake out a firm policy position, he will have no credibility or leverage to push congressional foot-draggers.
It won’t do for Trump to telegraph his flexibility — telling GOP lawmakers he’ll sign whatever they send him. He needs to be engaged and first send them a bold blueprint that evidences his confidence in the drive, ingenuity and sheer economic power of the American individual when unshackled from the chains of the federal government. He must not succumb to pressure to punish the so-called wealthy unless he wants to sabotage his own efforts.
We must remember that some 50 percent of Americans don’t even pay income taxes, which is astonishing on multiple levels. The so-called wealthy already pay more than their fair share, so let’s not go wobbly trying to defend lies to the contrary. Enough will never be enough for the demagogic left.
President Trump must be prepared to make the case that for tax cuts to work as intended — to actually stimulate growth — they must be across-the-board and substantial. This is the time for him to make a defining statement on economic policy and to take charge. My copy of “An American Renaissance” is available.