Search This Blog

Wednesday, February 22, 2017

Tax Reform Is Still Coming

Each day in the last two weeks, I've seen articles in the media telling me that the chances for any tax changes from Congress are small and growing smaller.  Here's the mantra repeated by these articles:  there's no plan on the table, and Congress hasn't yet voted on a bill, so there's disarray among the GOP and the White House which will prevent passage of any tax bill.  The one word response to this ongoing narrative is "NONSENSE!"

For some reason, the media (and the Democrats) are pushing the idea that a tax bill will spring to life fully formed, land on a desk on Capitol Hill, and then be quickly passed by the Congress.  It never worked that way (with one exception) and it never will.  The exception, of course, was the last modification to the tax laws that came under president Obama.  That bill just made permanent the already existing tax laws for over 99% of all tax payers and upped the rates for the top 0.4% of taxpayers.  Nothing was changed except for the top rates for a tiny portion of the taxpayers.  Obama agreed with the Republican leadership of the Senate on this plan and it was passed by Congress in about a week.  Sounds quick, doesn't it?  The reality, however, was quite different.  That tax bill was actually the end result of about a two year on-again-off-again negotiation between the White House and the Senate GOP.  It only passed quickly because failure to do so would have raised taxes on all Americans as the Bush tax cuts expired.  There is nothing like that at the present time, so a more normal process is being followed.

In the next month, we will surely see a tax plan, perhaps multiple tax plans coming from the Congress and the White House.  After the proposal, there will be the obligatory few weeks for the Democrats to denounce it as harmful to the middle class, a boon for the rich, unhelpful to the economy, and all the other standard complaints that always come when taxes might get reduced.  Ultimately, Congress will vote and some version of the tax law will be passed.  That may not happen until this summer, but it is coming nevertheless.

Right now, the key is to ignore the narrative that the media is pushing and to try to stick to reality.

No comments: