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Tax reform on life support?

November 20, 2017

Never mind the administration’s public face of optimism about tax reform.

The only way the Senate passes anything, even just something to compete with the House version, is if voters in the states represented by the holdouts apply enough pressure to sway their senators to vote for it.

That’s theoretically possible in the case of all but three or four senators. Trouble is, that’s likely to be more than twice as many as necessary to torpedo the bill.

There are at least three senators who simply have no pressure points to  target.  Flake, Cornyn and McCain are not candidates for re-election next year, and thus can follow their own inclinations.

None of these men have hidden their utter disdain for the President, a disdain that often translates into opposing anything at all that he supports.

Add to that the public’s uneasiness with the corporate tax reduction, and it becomes increasingly unlikely that the public pressure exists to sway these holdouts.

While the public will happily spend or bank any tax savings, there is something else that doesn’t make Mr. and Mrs. Average American happy at all.

That something is the sense that big corporations are being handed a perk rather than an opportunity.

Democrats for their part have been quick to tap into that perception and frame any corporate tax relief as a gift to the millionaires and billionaires, continuing their strategy and emphasis on creating and maintaining class warfare.

Additionally, there is the administration’s inability to fully sell their middle class tax relief plan to the country as a positive. People just aren’t buying it yet.

Although it is popular to point to the Reagan tax cuts as the ideal outcome expected from this legislation, most people alive today didn’t see that evidence.

What they did see, and now remember was that the Bush tax cuts of 2001 and especially 2003 didn’t keep the economy from  imploding during the Great Recession.

Opponents of the so-called supply-side or trickle-down economics point to the increase in the deficit without a corresponding increase in real income, i.e. overall wages, as evidence that the Tax Cuts and Jobs Act is just another gift to Big Business.

For the average person, pointing to the galloping stock market as a positive works in exactly the opposite way as the Trump administration intends.

What people see is that Big Business and investors are making out like fat rats in a fast food dumpster, while they still struggle to pay the bills.

Many companies are recording record gains in their net worth on paper, as their stock prices accelerate towards the stratosphere, judged against the values in 2016.

The obvious question from middle America is this one.

If corporations becoming more wealthy is a good thing, why aren’t those same corporations using their newly created wealth to raise wages and hire more people already?

Viewed with a bit more detachment, it can be fairly argued that they are, if the falling unemployment rate and newly created jobs figures are factored into the mix.

The problem is, almost all of those good stock price numbers are based solely on faith.

Investors and corporate interests are universally reacting to the President’s promise of tax relief and reform.

Unless Congress helps him to deliver on that promise, what went up can just as quickly go down.

From → op-ed

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