There are articles today about how the Blue Dog Democrats in the House are willing to back certain parts of the Republican tax plan. The Blue Dog Democrats are the few moderates left among the Dems; they number 18. The biggest problem seen by these members is that they want the tax plan to be revenue neutral, while the GOP plan is unlikely to be so.
It would be nice to have the support of 18 Democrats for the eventual bill, but there is no way to make the tax plan revenue neutral and effective at stimulating the economy at the same time. The whole point of the tax plan is to get more cash into the hands of individuals and businesses so that it can be put into the economy. If Congress just takes out as much as it puts in, there will be no such effect. The big problem here is that when the CBO scores the bill, it will only use static scoring. In other words, it won't consider the extra economic growth caused by a tax cut. We know that such growth will occur because it happened in the past after tax cuts under Kennedy, Reagan and Bush. As a result, the CBO will see any tax cut as increasing the deficit and therefore, not revenue neutral. A proper tax cut, however, will add to the deficit in the first year or two and then bring in all manner of additional revenue as economic growth soars. The GOP can't give up that growth in exchange for a few votes from the Blue Dogs.
It would be nice to have the support of 18 Democrats for the eventual bill, but there is no way to make the tax plan revenue neutral and effective at stimulating the economy at the same time. The whole point of the tax plan is to get more cash into the hands of individuals and businesses so that it can be put into the economy. If Congress just takes out as much as it puts in, there will be no such effect. The big problem here is that when the CBO scores the bill, it will only use static scoring. In other words, it won't consider the extra economic growth caused by a tax cut. We know that such growth will occur because it happened in the past after tax cuts under Kennedy, Reagan and Bush. As a result, the CBO will see any tax cut as increasing the deficit and therefore, not revenue neutral. A proper tax cut, however, will add to the deficit in the first year or two and then bring in all manner of additional revenue as economic growth soars. The GOP can't give up that growth in exchange for a few votes from the Blue Dogs.
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