As summer winds down, and Labor Day all too rapidly approaches, one cannot help but reflect on the dog days of summer and look forward to the approaching chill of autumn. As well, major league baseball teams enter that hallowed time to make a final run for a berth in the playoffs. And then there’s the U.S. Congress returning from its August recess and all eyes will be on whether the House and Senate can get anything accomplished. On the heels of the healthcare debacle, the GOP is angling for a win in their column and tax reform is up at the plate. The question is will they strike out or hit it into the stands?
The partisan debates are already rearing their ugly heads and revealing that the arguments around this issue will mirror those who defeated the healthcare bill. Another loss, in that fashion, could be the proverbial “nail in the coffin” of the Republicans and their majority in Congress. There is an emerging sentiment that President Trump and the Republican party should at least be shooting for the path of least resistance via a tax cut.
These days it seems in politics, as in baseball, superstition is very real and powerful. Last week, in hopes of conjuring up the same momentum that led to a 1986 tax overhaul under President Reagan, Republican leaders on the House Ways and Means Committee traveled to the Reagan Ranch, outside of Santa Barbara to pitch various options of an ambitious reform plan.
House Ways and Means Committee Chairman Kevin Brady, (R-TX) claims this will be a bipartisan effort and promises to invite Democrats to the table, saying they have a plethora of good ideas and have just as much interest in creating jobs and keeping U.S. companies from moving overseas. However, the proposed plan outlined last week appears to be purely a partisan effort, with negotiations between Trump and GOP leaders in the House and Senate.
The complexity of genuine reform is the reason there is doubt about getting anything accomplished. Confidence that Congress will be successful in passing legislation is extremely low. Tax Reform means blowing up the entire structure beginning with lowering rates, but genuine reform requires far more than just that. It must also create simplicity; fewer rates; fewer deductions, fewer loopholes, preferences and confusing elements in a mammoth tax code.
Alternatively, the GOP could enact the tax cuts with a "sunset provision," meaning that after ten years, the rates would automatically revert to what they are today. This tactic was used by President George W. Bush in 2001 and 2003. It effectively drops the rates a few percentage points to placate the masses and leaves in its wake all the complexity that creates confusion, inequity among taxpayers, and a global disadvantage for U.S. corporations. This tax cut route is a temporary fix, considered by some to be the easy way out that makes everyone in Washington D.C. feel better. However, it is not what President Trump promised during his 2016 presidential campaign.
Right now, it seems to be a wait and see the situation. Conservatives in the Trump camp are putting on rally caps and hoping for the best. As the late great Yogi Berra once said: “It ain’t over ‘til it is over.” He was right, just because you're down, doesn’t mean you are out. Many teams throughout baseball history have overcome the odds and made the playoffs in the final month of the season. For the sake of our nation, we can only hope the same for President Trump and tax reform before the end of the year. Who knows, it may be a case of the 1986 New York Mets or better yet the 2004 Red Sox in the American League Championship Series, against the New York Yankees. Let’s just hope there’s no bloody sock involved.
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