C'mon, GOP, Just Cut Taxes

In some alternate America, some Earth-2 (or Earth-27), there is a Republican Party capable of putting together a health care bill that isn't incoherent and unpopular. In some distant, misty Neverland, there is a GOP capable of balancing fiscal responsibility and limited-government principle with the creativity required to address working-class America's social crisis.But the world is what it is, and a party that offers nothing, whose ideological sclerosis and internal contradictions allow it to offer nothing, might as well just go pass a tax cut and call it a day.It is no secret that this is what President Donald Trump desires. The only reason we have spent so many months wandering the dark wood of Obamacare repeal-and-replace is that the Republican leadership in Congress persuaded itself that it could pull off a complicated fiscal maneuver, using health care reform to change the budget baseline in anticipation of a tax reform more comprehensive and enduring than George W. Bush's tax cuts 15 years ago.It couldn't, because there was never anything close to a Republican consensus about what health care reform should do. But this grand strategy's failure still leaves the party with a simpler option, one that would satisfy the yearning for tax cuts that remains a divided conservatism's only certain common ground. Republicans could just go ahead and cut taxes the way Bush did -- without major offsets but with a 10-year expiration date, so that all you would need is 50 votes plus Mike Pence to do it.I'm not saying that Republicans couldn't still do a comprehensive and permanent tax reform in theory. Set health care aside entirely and there are still lots of clever and plausible ways to overhaul and improve the tax code without sacrificing revenue.You could cap various perverse deductions that mostly benefit wealthy blue-state taxpayers, like the home-mortgage and state and local tax deductions, and use the savings to lower rates across the board. You could cut the corporate tax rate and raise the capital-gains tax rate to compensate, as Sen. Mike Lee has proposed. You could even (gasp, heresy, gasp) raise the top income tax rate, as Steve Bannon reportedly wants to do, and use the savings to cut payroll taxes or fund a new child tax credit.But Republicans don't seem equipped to pull off anything complicated, they don't look united enough to take political risks, and they aren't ideologically ready to pass anything heretical. So barring a sudden transformation in the party and its leadership, a temporary, deficit-financed tax cut is the only thing that has a decent chance of happening.And while it's not the greatest idea, neither is it a terrible one. One reason among many that Obamacare repeal has run aground is that the deficit picture doesn't look as dire as it did when the health care law was passed -- and Obamacare itself is not driving the kind of spending surge that many of its critics (myself included) feared.Instead, the ugly years of fiscal cliffs and shutdowns and sequesters produced a certain amount of deficit reduction even without a grand bargain, Medicare spending has been coming in lower than expected, and interest rates have stayed historically low.Meanwhile, economic growth is still sluggish, wage growth is tepid, and the work force participation rate is still below pre-recession levels. The best time for right-wing Keynesianism was probably four years ago -- ah, for the Romney administration. But the economy is stagnant enough that you can make a decent tax-cuts-as-stimulus case, especially if Republicans were to focus on corporate and payroll taxes, on business and workers, instead of just aiming for the lowest possible top income tax rate.And if the tax cuts are pegged to expire in a decade, you'll have a built-in opportunity to negotiate deficit reduction in 2027, when The Rock is president, Kid Rock is running the Senate, and the speaker of the House is an as-yet-undiscovered YouTube star.Sorry, slipped into nihilism for a minute there. Back to deficit-financed tax cuts: They're suboptimal and risky, but they have a basic appeal to Republican politicians, they're more politically marketable than what the party was trying (I use that word loosely) to accomplish with health care, and they might actually give the Trump economy a still-needed boost.Personally I can live with a Trump administration that appoints conservative judges and fails at everything else, since judicial appointments are about the only thing I trust this GOP to do.But if Congress insists on continuing to try legislating, I will give a 10-year tax cut my official Trump-era seal of approval: They could certainly do worse.Ross Douthat is a columnist for The New York Times, where this column first appeared.What's your view?Got an opinion about this issue? Send a letter to the editor, and you just might get published.  Continue reading...

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