The Democrats’ Half-Assed Answer to the Trump Tax Cuts
The Democratic Party brain trust is floating new ideas on taxes. Their economics are questionable and their politics are worse.
US House Speaker Paul Ryan (R-WI) gestures to President Donald Trump at a celebration of Congress passing the Tax Cuts and Jobs Act on the South Lawn of the White House on December 20, 2017 in Washington, D.C.Chip Somodevilla / Getty
From the heart of Barack Obama’s exiled brain trust comes Jason Furman, former head of Obama’s Council of Economic Advisers, with a proposal in the Wall Street Journal to “repeal and replace” the recent Trump/Republican tax cuts. How do his ideas compare to alternatives that might appeal to readers of this journal — not to mention the vast legions of Berniecrats and The Resistance?
Furman’s analysis provides a useful window into the concerns of financial elites. To be fair, he takes aim at certain sources of tax relief for the rich, including those related to capital gains and “pass-through” entities (a form of business organization often used by medium-to-large-sized companies). In general, however, he prioritizes deficit reduction and a lower tax burden on corporate capital. In short, if Furman’s views are any indication, when it comes to tax policy mainstream Democrats have learned nothing and forgotten a great deal.
Scary Deficits
Furman’s point of departure is the impact of the Trump tax cuts on deficits. He glosses over the question of whether the current deficit is too high by referring to projections of its long-run trajectory. The deficit-hawk mantra always goes, “If nothing is done, in sixty years. . . . ” The fallacy here is that something is always done. Things that can’t continue, don’t. Furman admits as much himself. The real question is what to do now.
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