Wash. D.C. msn.com
The boldest ideas for changing the nations’s tax code are either dead or on political life support or a ralization that the status quo is best, as the republican effort in Congress to reshape the tax system moves much more slowly than lawmakers and their allies in business had hoped. The clear winner, so far, is the status quo.
Republicans who control both chambers, are scouring the tax code, searching for ways to offest the deep rate cuts they desire. But their prospects for border adjustments–which would tax imports–and for ending the buisness intereset deduction and making major changes to individua tax breaks for health and retirement have allhit resistance within the party. The only big revenue raising provision with anything close to Republican consensus is repealing the deduction for state and local taxes, and that idea faces objections from blue state lawmakers in the party. The GOP’s dreams have collided with interest group lobbying and the tax system’s reality. Politician’s all profess to hate the tax code, but they don’t agree on exactly what they hate. Voters gripe about complexity but are wary of losing cherished breaks that are woven into the economy.
“Eventually you run out of ways to pay for your promises,” said Alan COle, an economist at the Tax Foundation, which favors a simpler code withlower rates. “There aren’t any free, obvious sources of money where you can just do the thing and nobody gets mad.” At some point people start thinking the status quo is not so bad. Republicans are still hunting for ideas to soften the revenue loss from their proposed tax rate cuts, and party eaders say they will finish a historic tax code revision by eyar’s end. President Trump said on Twitter late Sunday that the process was ahead of schedule and “moving along–very well.”
But a fruitless revenue quest may lead the GOp to second tier options. ANd they won’t be able to rely on generating lotsof revenue from economic growth, because congressional scorekeepers are likely to make conservative estimates. On possibility is a temporary tax cut that would expire to comply with rules preventing long run deficts. The other is staying closer to the status quo.