When Ronald Reagan signed the 1986 Tax Reform Act into law a lot of those who worked hard to get it done looked at one another and asked, “What’s next?” Well, it took about 30 years, but we’re about to finally have the answer.
There’s a lot to like about the reform package that is proceeding in fits, bumps and starts and is expected to land on the president’s desk on Friday. Once the president signs it the United States will no longer have the highest corporate tax rate in the industrialized world. That should generate growth of the economy like nobody has seen in years, and should stop the flight of American companies to low-tax and cheap-labor destinations in the rest of the world. That would squelch Democratic talking points.
Most of the new tax rates are lower, the standard deduction has been doubled, and the code has been simplified considerably.
That’s still not enough because, somewhere between 1986 and now, the Republicans got lost in the weeds. It was probably when President George H.W. Bush announced that tax increases were on the table.
The focus now must be on growth significant enough to bring the total U.S. debt, now equal to about a year’s gross domestic product, down to a level that, as a percentage of the GDP, it can be dealt with by holding the line on spending increases.
There’s a lot to be done. The tax rate is not flat across the board, for instance. There should be time to celebrate a victory over Christmas, assuming all goes well, but moving quickly to the next phase is important. If there’s the growth the nation has been promised, there must be more money put in the private economy and the government must get by on less. The congressional leadership must lead in that direction or get out of the way. Replacements will be available.
-The Washington Times