New York Times editorial, President Trump’s Laughable Plan to Cut His Own Taxes:
As a rule, Republican presidents like offering tax cuts, and President Trump is no different. But the skimpy one-page tax proposal his administration released on Wednesday is, by any historical standard, a laughable stunt by a gang of plutocrats looking to enrich themselves at the expense of the country’s future.
Two of Mr. Trump’s top lieutenants — Steven Mnuchin and Gary Cohn, both multimillionaires and former Goldman Sachs bankers — trotted out a plan that would slash taxes for businesses and wealthy families, including Mr. Trump’s, in the vague hope of propelling economic growth. So as to not seem completely venal, they served up a few goodies for the average wage-earning family, among them fewer and lower tax brackets and a higher standard deduction. ...
Mr. Trump’s plan aims to cut corporate tax rates from 35 percent to 15 percent. ... Mr. Trump would also apply that 15 percent tax rate to pass-through income that business owners get from limited liability companies, a change that would directly benefit real estate developers like him. This would also create a huge incentive for wealthy Americans to turn their earnings into pass-through income in order to avoid paying higher personal income tax rates. This is no idle threat. Many Kansas residents, including the men’s basketball coach of the University of Kansas, have sheltered income in L.L.C.s since that state exempted income generated through such legal structures from its income tax in 2012. ...
Mr. Trump has already sent a strong message about where his sympathies really lie. They lie not with the working people who elected him, but with the plutocracy that envelops him.
Wall Street Journal editorial, Trump’s Tax Principles:
The White House rolled out its tax principles on Tuesday, investing new energy in the first serious reform debate in 30 years. While the details are sparse and will have to be filled in by Congress, President Trump’s outline resembles the supply-side principles he campaigned on and is an ambitious and necessary economic course correction that would help restore broad-based U.S. prosperity.
Many voters heard Mr. Trump’s make-America-great-again slogan as a promise to raise their incomes and improve economic opportunities after a long stagnation. Eight years of 2% growth since the recession ended in 2009 is the weakest recovery in the postwar era, and the result has been rising anxiety and diminished expectations for millions of Americans.
Faster growth of 3% a year or more is possible, but it will take better policies, and tax reform is an indispensable lever. Mr. Trump’s modernization would be a huge improvement on the current tax code that would give the economy a big lift, especially on the corporate side. The reform would sharply cut the business income rate to 15% from 35%, while simplifying the code for individuals and cutting some marginal rates.
Though Mr. Trump’s proposal dabbles in some politically fashionable tax redistribution, at its core it is an exercise in growth economics. The cuts would be permanent and immediate, and the rates are low enough to enhance the incentives to work and invest. The plan also fits the economic moment. ... Republicans won’t get another opportunity like this to reshape the tax code for a generation.
The Trump principles show the President has made growth his highest priority, and they are a rebuke to the Washington consensus that 1% or 2% growth is the best America can do. Now Mr. Trump has to show results. If anything close to his this reform can survive the political maelstrom, it will go a long way toward returning to the abundance of the 1980s and 1990s.
New York Times op-ed: Living in the Trump Zone, by Paul Krugman:
Fans of old TV series may remember a classic “Twilight Zone” episode titled “It’s a Good Life.” It featured a small town terrorized by a 6-year-old who for some reason had monstrous superpowers, coupled with complete emotional immaturity. Everyone lived in constant fear, made worse by the need to pretend that everything was fine. After all, any hint of discontent could bring terrible retribution.
And now you know what it must be like working in the Trump administration. Actually, it feels a bit like that just living in Trump’s America.
What set me off on this chain of association? The answer may surprise you; it was the tax “plan” the administration released on Wednesday. The reason I use scare quotes here is that the single-page document the White House circulated this week bore no resemblance to what people normally mean when they talk about a tax plan. ...
[W]hy would the White House release such an embarrassing document? Why would the Treasury Department go along with this clown show?
Unfortunately, we know the answer. Every report from inside the White House conveys the impression that Trump is like a temperamental child, bored by details and easily frustrated when things don’t go his way; being an effective staffer seems to involve finding ways to make him feel good and take his mind off news that he feels makes him look bad. ...
I’d like to make a plea to my colleagues in the news media: Don’t pretend that this is normal. Let’s not act as if that thing released on Wednesday, whatever it was, was something like, say, the 2001 Bush tax cut; I strongly disapproved of that cut, but at least it was comprehensible. Let’s not pretend that we’re having a real discussion of, say, the growth effects of changes in business tax rates.
No, what we’re looking at here isn’t policy; it’s pieces of paper whose goal is to soothe the big man’s temper tantrums. Unfortunately, we may all pay the price of his therapy.
Wall Street Journal op-ed: Trump’s Finest Moment (So Far), by Kimberley A. Strassel:
Here’s how to know a Republican president has scored big on a proposed tax reform: Read the New York Times — and chuckle. ...
The president’s tax proposal — a big, swashbuckling vision for enacting pro-growth principles — offends many on the left by its very nature. Within a few minutes of its release, liberal economists, politicians and pundits were ripping it as a payoff to the wealthy, a deficit buster, regressive, unrealistic. That alone is proof Mr. Trump is getting the policy right.
Yet what Mr. Trump may be doing best is the politics of tax reform. The president’s proposal marks not only a triumph of ideas, but a savvy acknowledgment of the Washington landscape. After a rocky first few months, Mr. Trump is playing to win. ...
Mr. Trump’s plan ... [compiles] into one document all the tax-reform ideas that most inspire conservative movers and shakers. Simplify the brackets? Check. Lower rates? Check. Harmonize rates between corporations and small businesses? Check. Move to a territorial corporate-tax system? Check. Kill off the estate tax, the alternative minimum tax, itemized deductions, and corporate loopholes? Check. This is the sort of stuff that think tanks, congressional reformers and business groups have been salivating over for years.
Good policy makes for good politics. The Trump proposal has galvanized all those groups that wield influence with Republicans. ... The Trump plan is ... a blunt acknowledgment that Democrats have no interest in working with him to harmonize, simplify and reduce rates for both corporations and individuals. It is instead pitched directly at Republicans, since it will take a united GOP conference to get it done.
Wall Street Journal editorial, A GDP Warning for the GOP:
The U.S. economy grew by a scant 0.7% in the first quarter of 2017, and Republicans should take it as a warning that they’d better start moving on tax reform if they want to prevent a midterm election washout in 2018.