Taxes

“It’s about $100 billion per point”

Written by SK Ashby

We don't know exactly what the GOP's "tax reform" plan will look like and we may not know for months, but I think we do know what it won't look like it.

It won't look anything like what Trump and the White House are calling for because, as Senator John Thune (R-SD) points out, even the slightly less insane congressional Republican plan will be extremely difficult if not impossible to pass.

Trump’s fixation with a 15 percent tax rate for corporations and and other businesses remains a major sticking point, sources familiar with the talks said. The rate is now 35 percent. [...]

The president’s been out there talking about a 15 percent rate; the House has talked about 20; but to get it down from 35 to 20, it’s about $100 billion per point,” said Sen. John Thune of South Dakota, the third-ranking Senate Republican.

In other words, even their slightly less insane plan will cost at least $1.5 trillion, and my gut says that's a low-ball figure.

The Bush Tax Cuts cost hundreds of billions of dollars and that was a meager tax cut of just 4.6 percent.

You may say it's not fair to compare a tax cut for individuals to corporations and businesses, but passing the kind of cuts Republicans are considering would probably lead to a wave of additional people declaring themselves businesses. That's exactly what happened in Kansas when former Governor Sam Brownback eliminated corporate income taxes. As you know, that didn't turn out very well for the state. The state government went broke very quickly and the state's economy did not benefit.