Winning Bigly on Taxes
President Trump and Republicans make their mark on history with ambitious tax cuts.
Congress passed the largest overhaul of the tax system in decades yesterday, handing President Trump his first major legislative victory and clearing the way for strong economic growth likely to provide potentially long-term electoral benefits for Republicans.
This historic development is already causing apoplexy and aneurysms on the Left where allowing people to keep their own hard-earned money is heresy. Anything that tends to roll back government power is a threat to left-wingers who are happiest when bossing other people around. Nothing is more frightening to leftists than economic freedom.
The tax legislation reduces corporate and personal income tax rates, increases the child tax credit, caps state and local tax deductions, doubles the estate tax exemption, repeals Obamacare’s hated individual mandate, and opens part of the Arctic National Wildlife Refuge (ANWR) to energy exploration, according to media reports. Getting the bill through Congress also burnishes – at least temporarily – the conservative credentials of Senate Majority Leader Mitch McConnell (R-Ky.) and Speaker of the House Paul Ryan (R-Wisc.) who have both repeatedly come under assault by conservatives in their own party.
President Trump spent much of yesterday taking a well-deserved victory lap. He hosted a large group of lawmakers at the White House to celebrate the tax win.
“The Tax Cuts are so large and so meaningful, and yet the Fake News is working overtime to follow the lead of their friends, the defeated Dems, and only demean,” Trump tweeted yesterday. “This is truly a case where the results will speak for themselves, starting very soon. Jobs, Jobs, Jobs!”
After the House gave what was thought at the time to constitute final congressional approval of the legislation Tuesday, the Senate’s parliamentarian ruled that provisions in the bill ran afoul of the budget rules of the reconciliation process that Republicans used to preclude the possibility of a filibuster by Democrat senators. The offending provisions were then struck from the measure.
So the House passed the measure, formally referred to as the Tax Cuts and Jobs Act, again, this time by a 224 to 201 vote. Among the nays were 12 Republican members. They are: Darrell Issa and Dana Rohrabacher of California; Walter B. Jones of North Carolina; Rodney Frelinghuysen, Leonard Lance, Frank A. LoBiondo, and Christopher H. Smith of New Jersey; Dan Donovan, John J. Faso, Peter T. King, Elise Stefanik, and Lee Zeldin of New York.
Early yesterday morning the Senate concurred with the House in a 51 to 48 vote, giving final congressional approval of the legislation. All Republicans present and voting voted in the affirmative. Sen. John McCain (R-Ariz.) missed the vote because he was receiving treatment for brain cancer.
Many of the provisions in the Tax Cuts and Jobs Act are likely to spawn to contribute to economic growth the likes of which hasn’t been seen since the 1990s.
A new Heritage Foundation analysis projects the legislation “will increase the level of gross domestic product in the long run by 2.2 percent. To put that number in perspective, the increase in GDP translates into an increase of just under $3,000 per household. Though we only estimate the change in GDP over the long run, most of the increase in GDP would likely occur within the 10-year budget window.”
The measure does things that Republicans have been promising to do for decades.
The bill slashes the corporate income tax rate from an oppressive 35 percent to a much more competitive 21 percent. On the campaign trail, Trump had pushed a 15 percent rate.
Individual income tax rates will fall and the standard deduction for filers will rise dramatically. According to a Fox News summary:
The bill keeps the seven tax brackets while reducing the rates for five of them. The new rates start at 10 percent and rise to 12, 22, 24, 32, 35 and 37 percent. The highest rate – 37 percent – applies to individuals whose income exceeds $500,000. For joint filers, the threshold is $600,000. This rate is being lowered from 39.6 percent.
Effective 2019, it repeals the hated Obamacare individual mandate that forces Americans to buy health insurance. This could, depending on how Republicans play it, make it easier to dispose of the remaining bits of the un-American leftist abomination known as the Affordable Care Act and inject desperately needed market discipline into the health care system.
The soon-to-be law opens an ugly, barren airport-sized sliver of ANWR to oil drilling, a move that is causing panic among left-wing environmentalists who for years have campaigned against drilling in the region. “There isn’t even a tree to hug in ANWR,” former Rep. Jason Chaffetz (R-Utah) quipped on “The Five” yesterday.
The Tax Cuts and Jobs Act eliminates the alternative minimum tax (AMT) on corporations but not on individuals. It boosts the exemption to $500,000 for single taxpayers and $1 million for couples.
The legislation allows taxpayers to claim a $2,000 credit for each qualifying child under 17. It retains the current death tax rate of 40 percent but raises exemption levels which are now just under $5.5 million for individuals and $11 million for married couples. The law also maxes out the mortgage-interest rate deduction for mortgages up to $750,000, down from the current $1 million.
The measure caps the deductibility of state and local taxes (SALT) on federal income tax returns at $10,000. Setting a limit on SALT deductions earned the ire of Republicans in high-tax states.
Taking away the deductibility of state and local taxes is a good move, according to Veronique de Rugy of George Mason University’s Mercatus Center, because it eliminates the “federal distortion that enables punitive tax policy in states such as California, Illinois, New York, and New Jersey.” Although getting rid of the deduction is unpopular in some circles, the reform puts pressure on greedy states to do right by their residents by reducing state-level taxes. It is also the fairer approach because it stops the residents of low-tax states from effectively subsidizing those in high-tax states.
Those on the Left aren’t taking things well.
Before the final votes in Congress, celebrity Rosie O’Donnell apparently committed federal felonies by offering huge bribes to lawmakers to vote against the tax package. In a tweet time-stamped 10:25 p.m. on Tuesday, the TV personality offered $2 million each to Sens. Susan Collins (R-Me.) and Jeff Flake (R-Ariz.) to vote against the bill. “No shit[.] 2 million cash each[,]” she tweeted.
Presumably to show she was serious, O’Donnell, a longtime nemesis of Trump, urged the two senators to direct-message her on Twitter.
Eyeing a presidential run someday, Rep. Joe Kennedy III (D-Mass.) put his name on an email that was mass-distributed by President Obama’s tax-exempt pressure group, Organizing for Action. It consisted of – what else? – a collection of lies and class warfare-based hatred.
The tax bill that the House passed just minutes ago, and the Senate passed late last night, will touch every American life. It is is [sic] a cruel reminder of the choices our congressional leaders have made. They’ve chosen inherited wealth over hard-earned income. They’ve chosen executive profits over employees’ retirement savings. They’ve chosen a massive, permanent gift to the richest corporations – paid for by mothers working double shifts, by low-income students struggling to get by, and by vulnerable Americans not getting the help they need.
This Chicken Little, who took Barney Frank’s old seat, warned that next Republicans will “come for Medicaid, for education and food assistance, for Medicare and Social Security – programs that you’ve paid into, so that they’d be there when you need them, or when a friend or neighbor needed a helping hand. And they’ll have the gall to call it ‘entitlement reform.’”
Do Republicans have that kind of gall in them?
We can only hope.