Congress

The GOP Tax Plan May Also Be Falling Apart

JM Ashby
Written by JM Ashby

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.

  • muselet

    The Party of Fiscal Responsibility, ladies and gentlemen.

    (Also, does anyone else find it hilarious and frightening in equal parts that the objections to Paul Ryan’s silly plan come from Rs moaning that it’s insufficiently conservative?)

    –alopecia

  • mnpollio

    Yes – the almighty tax cut trumps everything. And what you usually find is that these people bitching about their taxes are completely uneducated that they are paying some historically low tax rates already and yet they want no interruption in all these services that the government provides for them…oh excuse me, they want no interruption in all of the services that benefit them that they pretend aren’t government run. Kind of like the idiots stomping out in public demanding that the government get out of their Medicare. And they are old enough to know better – so much for the wisdom comes with age meme.

  • ninjaf

    Back to the drawing board, Mr. Ryan. Looks like you need to find some more magic asterisks for your tax plan.

  • Aynwrong

    Republican concern for Debt & deficit spending has never been anything but an ironic beard for their obsessive tax cutting fetish.

    I guess a border tax fits perfectly into the latest version of Populism 3.0 that we’ve all been watching feverishly unfold since the Bush Admin folded and the Kenyan Usurper was elected. Kind of like how 8 years ago there a new “populist” movement of “independents” who all happened to be wearing tri-cornered hats & dangling tea bags.

    Anything to avoid admitting that your party is insane and their ideas are destructive as hell.

  • My goodness, can’t those Washington fat cats do anything right? … wait…