This puts the debate about tax reform in a whole new light for me.
Speaker Paul Ryan apparently wants to use border taxes to pay for his massive tax cut package. The problem is a border tax is one of the dumbest ideas in Washington and there may not be enough Republicans willing to betray one of their core economic principles (and their corporate constituents) to pass it.
Many Republican senators say privately they detest the concept, fretting that it will hurt their in-state retailers like Walmart, which is headquartered in Cotton's state of Arkansas. Senate Finance Chairman Orrin Hatch (R-Utah), sources said, has warned Trump and Ryan that border adjustment won't likely have the support needed to clear the Senate.
Hatch, in an interview after Ryan's presentation, said the speaker “didn’t cover [the border adjustment proposal] as specifically as I would have liked.” And Sen. Roy Blunt of Missouri, the fifth-ranking GOP senator, said the Finance Committee will likely go a “different way.”
Others were more unequivocal.
“It’s beyond a complication. It’s a bad economic proposition,” said Sen. David Perdue (R-Ga.).
It may be an oversight on my part, but I did not realize Trump's fantasy border tax had become such a crucial element of Ryan's plans. More specifically, Ryan intended to use the revenue generated by border taxes to pay for cutting taxes for the wealthy.
And yet that disastrous proposal still wouldn't be enough to cover the cost. Republicans estimate border taxes would generate a trillion dollars of revenue over 10 years, which seems unlikely, but the cost of Ryan's tax cuts would be far higher. And in the meantime, our economy would swiftly dive into the gutter as the price average Americans pay for virtually everything would increase.
Even if Ryan's plan falls apart under scrutiny, that doesn't mean Republicans won't cut taxes now and worry about the consequences later. A full repeal of Obamacare would also amount to a significant tax cut for the wealthy.
Paying for Ryan's tax cuts with border taxes may be worse for the country than simply passing tax cuts without paying for it because, at the end of the day, the federal deficit is relatively inconsequential to average Americans but paying a higher price for essential goods adds up very quickly.
The best idea of all, of course, would be to not cut taxes. But that's the primary reason Republicans support Trump, isn't it? If they aren't going to cut taxes, what's the point? I actually know people who voted for Trump just because they believed it would lead to a tax cut.