Patriots: For over 26 years, your generosity has made it possible to offer The Patriot Post without a subscription fee to military personnel, students, and those with limited means. Please support the 2024 Year-End Campaign today.

July 13, 2017

Fixing the ‘Rotting Carcass’ Tax Code

Cynics are said to be people who are prematurely disappointed about the future. Such dyspepsia is encouraged by watching Republicans struggle to move on from the dog’s breakfast they have made of health care reform to the mare’s nest of tax reform.

Cynics are said to be people who are prematurely disappointed about the future. Such dyspepsia is encouraged by watching Republicans struggle to move on from the dog’s breakfast they have made of health care reform to the mare’s nest of tax reform. Concerning which, House Speaker Paul Ryan, whose preternatural optimism makes Candide seem morose, says: “If we’re going to truly fix our tax code, then we’ve got to fix all of it.” Trying to fix “all of” immigration in 2013 and health care in 2010 with “comprehensive” legislation left almost everyone irritable. Perhaps the third time is the charm. Sen. Ron Wyden is skeptical about fixing much this year, even given Senate Majority Leader Mitch McConnell’s decision to limit the August recess.

The fourth-most senior Democrat and ranking minority member on the tax-writing Finance Committee, Wyden, 68, is usually relaxed but now is especially so, for two reasons. He was just elected to a fourth term. And for him and other Finance Committee Democrats, tax reform is, so far, an undemanding spectator sport. This was underscored last weekend when, as he was being driven from one Oregon town hall to another, he read a Wall Street Journal story headlined: “GOP Tax Overhaul’s Fate Rests on ‘Big Six’ Talks.”

Five of the six were in an almost taunting photo provided to the Journal by Ryan’s office — Ryan, McConnell, House Ways and Means Committee Chairman Kevin Brady, Senate Finance Committee Chairman Orrin Hatch and Treasury Secretary Steven Mnuchin. The missing sixth person was National Economic Council Director Gary Cohn. No congressional Democrat is included. Evidently, Republicans plan to pass tax reform without Democratic votes, under “reconciliation,” which is inherently partisan — 51 votes will suffice — and limits debate to 20 hours. The 1986 reform, the gold standard of bipartisan tax legislation, was on the Senate floor for more than 100 hours spread over 20 days — after seven days of hearings and 16 days of mark-up.

Ryan and McConnell say tax reform will be “revenue neutral.” This might require dynamic scoring — calculating that reformed incentives will stimulate economic growth — to project implausible growth rates. Plausibility is, however, optional, as it was in April, when Mnuchin’s department produced a tax plan that resembled Lincoln’s “soup that was made by boiling the shadow of a pigeon that had starved to death.” The document — “shorter than a drug store receipt,” says Wyden — was one page long, contained 218 words, eight numbers and a thumping vacuity, the promise to “eliminate tax breaks for special interests.”

Last November, Mnuchin told CNBC there would be “no absolute tax cut for the upper class,” meaning no net cut after lost deductions. In Mnuchin’s January confirmation hearing, Wyden mischievously suggested calling this “the Mnuchin rule,” which enthralled Mnuchin, who later said: “I feel like I’m now in good company with the Volcker rule and the Buffett rule.” In a June hearing, however, Mnuchin told Wyden: “You made it a rule, I didn’t make it a rule.” It would be entertaining to watch Republicans try to adhere to that rule while fulfilling their promise - from which they began retreating on Tuesday — to repeal the 3.8 percent Obamacare tax on investment income.

No Democrat, says Wyden, likes the status quo. When he recently described the tax code as “a rotting economic carcass,” his wife asked him to stop scaring the children. The complexity of the code, which is more than 4 million words, is why America has more people employed as tax preparers (1.2 million) than as police and firefighters. If tax compliance were an industry, it would be among the nation’s largest; it devours 6.1 billion hours annually, the equivalent of more than 3 million full-time workers.

Wyden knows he sounds like “a one-song juke box” when he keeps stressing “wage growth” but he notes that last week the encouraging number of jobs created in June (222,000) was accompanied by discouraging wage growth (year-over-year, 2.5 percent, barely ahead of inflation). Many economists are puzzled that low unemployment (4.4 percent) is not forcing employers to bid up the price of labor. Wyden says he is puzzled by neither the cause (persistent slow growth, limping at around 2 percent) nor the cause of this cause — insufficient money in middle-class paychecks to power an economy where 70 percent of the fuel comes from consumer spending. He favors, for example, doubling the earned income tax credit. He seems, however, to be pre-emptively, but not prematurely, disappointed about a legislative process that will fall somewhat short of fixing “all of” what ails the rotting carcass.

© 2017, Washington Post Writers Group

Who We Are

The Patriot Post is a highly acclaimed weekday digest of news analysis, policy and opinion written from the heartland — as opposed to the MSM’s ubiquitous Beltway echo chambers — for grassroots leaders nationwide. More

What We Offer

On the Web

We provide solid conservative perspective on the most important issues, including analysis, opinion columns, headline summaries, memes, cartoons and much more.

Via Email

Choose our full-length Digest or our quick-reading Snapshot for a summary of important news. We also offer Cartoons & Memes on Monday and Alexander’s column on Wednesday.

Our Mission

The Patriot Post is steadfast in our mission to extend the endowment of Liberty to the next generation by advocating for individual rights and responsibilities, supporting the restoration of constitutional limits on government and the judiciary, and promoting free enterprise, national defense and traditional American values. We are a rock-solid conservative touchstone for the expanding ranks of grassroots Americans Patriots from all walks of life. Our mission and operation budgets are not financed by any political or special interest groups, and to protect our editorial integrity, we accept no advertising. We are sustained solely by you. Please support The Patriot Fund today!


The Patriot Post and Patriot Foundation Trust, in keeping with our Military Mission of Service to our uniformed service members and veterans, are proud to support and promote the National Medal of Honor Heritage Center, the Congressional Medal of Honor Society, both the Honoring the Sacrifice and Warrior Freedom Service Dogs aiding wounded veterans, the Tunnel to Towers Foundation, the National Veterans Entrepreneurship Program, the Folds of Honor outreach, and Officer Christian Fellowship, the Air University Foundation, and Naval War College Foundation, and the Naval Aviation Museum Foundation. "Greater love has no one than this, to lay down one's life for his friends." (John 15:13)

★ PUBLIUS ★

“Our cause is noble; it is the cause of mankind!” —George Washington

Please join us in prayer for our nation — that righteous leaders would rise and prevail and we would be united as Americans. Pray also for the protection of our Military Patriots, Veterans, First Responders, and their families. Please lift up your Patriot team and our mission to support and defend our Republic's Founding Principle of Liberty, that the fires of freedom would be ignited in the hearts and minds of our countrymen.

The Patriot Post is protected speech, as enumerated in the First Amendment and enforced by the Second Amendment of the Constitution of the United States of America, in accordance with the endowed and unalienable Rights of All Mankind.

Copyright © 2024 The Patriot Post. All Rights Reserved.

The Patriot Post does not support Internet Explorer. We recommend installing the latest version of Microsoft Edge, Mozilla Firefox, or Google Chrome.