The Trump Administration may not pass tax reform by its initial summertime goal. The plan was to make changes to both the individual and corporate rates in one unified goal but agreeing on the specifics had been challenging.
Interestingly, four respected economists published an Op-Ed in the New York Times last Wednesday: Steve Forbes, Larry Kudlow, Arthur Laffer and Stephen Moore; they are co-founders of the Committee to Unleash Prosperity and advisers to Trump’s campaign. According to The Hill, they “argued that a business-only tax cut bill would be the easiest way for Trump to score a legislative achievement early in his presidency,” and that “Trump shouldn’t tackle comprehensive tax reform in one pass. Instead, Republicans should first work on a bill that makes tax changes for businesses and includes infrastructure funding to make it attractive to Democrats. They then could tackle individual income tax reform in 2018.”
From the op-ed: “Republicans need to act with some degree of urgency. The financial markets and American businesses are starting to get jittery over the prospect that a tax cut won’t get done this year,” the campaign advisers wrote. “A failure here would be negative for the economy and the stock market and could stall out the ‘Trump bounce’ we have seen since the president’s election.”
I’m open to the idea of focusing on business tax cuts, but a 15% rate is probably too low. 20% is a good number without causing too much of a revenue problem. Since we’re at 35% now, modifying the rate to 20% is moderate and not too drastic — which is something you must aim for; the growth it will give would pay for the cut itself. Couple THAT tax change with cutting spending and you can have a much stronger economy overall — which would be good for the debt and deficit.