Couple of topics today.
First, an update on the tax plan negotiations. The good news is that the debate seems to be centered on a few aspects of the individual tax code, with key business provisions getting a large dose of radio silence. We haven’t heard much griping (at least yet) from the Democrats and the media on things like the 20% corporate rate, the 25% pass-through rate, low cost repatriation of offshore earnings, and immediate write-off of capital equipment expenditures. We’re even hearing crickets on the alternative minimum tax, and the higher standard deductions seem just fine. Charity appears safe. There’s no hue and cry over the death tax repeal. All the fuss appears focused on whether state/local taxes, property taxes, and mortgage interest will still be deductible. It’s probably smart to threaten those and change the negotiating plateau.
We still don’t know the breakpoints for the three new brackets, which is the real ball game, so it is not possible to tell how much of the tax cuts go where. But it seems clear that the bulk will go to higher-income taxpayers, as it should since they are the ones that actually pay taxes. In addition, the high-tax states are screaming bloody murder that the state/local deduction might go away, and they are joined by the entire real estate lobby in abject horror that the mortgage interest deduction might not survive. For a few days, Team Trump floated the idea that maybe it would give folks a choice of deducting either interest or taxes, or maybe phase out the deductions as AGI went up, or allow interest to be deducted only if the mortgage payment was due on an odd-numbered date. (Okay, only kidding on the last one). But any of this flies in the face of the goal of simplifying the code, and folks across the income spectrum would be hit if these deductions were tinkered with.
So today we get the real trade off, and maybe this is where they were headed all along. Word was leaked that the tax writers are considering adding a fourth bracket. And no, it’s not 8% at the low end but rather a higher tax on the “rich.” It’s certainly not the conservative approach to tax reform, and it’s not even the traditional GOP approach either (if someone can even tell me what that is these days). But it might be the cover Trump needs to get a small number of vulnerable Democrat senators’ support. If it gives them the opening to claim that Trump is willing to tax the rich, and if it isn’t so big that it blunts the economic growth impact and allows the business reforms to survive intact, well…
The fact is though that the Democrats know full well that if the business tax reforms become law, the economy will get a huge boost that will begin to be visible just in time for the 2018 elections. Giving Trump a win on this is not in their playbook. So don’t take silence as agreement. Ditto for some in the GOP establishment, in spite of the obvious fact that failing on tax reform could doom them too. We’ll see how it all plays out, but give Trump mega points for sticking to his guns and refusing to release his tax returns. Can you imagine the 24/7 coverage of third-decimal-place media calculations on how much Trump would benefit from the new plan? Even he might not have been able to withstand that. When you toss in the lobbying free-for-all that is going on, the plan is a long way from done, and it’s still a jump ball if a meaningful reform package can be achieved. But the process will be fascinating to watch.
Trump is hitting the right tone in his remarks on the shooting, comforting as much as possible the victims and their families and praising the first responders, law enforcement, and the courage of those who jumped in to help. But what can you really say to those whose lives were dramatically altered in a few random minutes of pure senseless evil? Little adds up here. Unlike the terror attacks that are clearly motivated by radical Islamic doctrine, this one doesn’t seem to have a rationale. Theories abound, from some association with ISIS, to an event that caused the shooter to snap, to political hatred for conservatives, to drugs, to a multi-shooter conspiracy. Maybe it’s just an Occam’s Razor explanation that the guy was a psychopath who hid it well. My guess is that the investigation will go on for quite a while and there will be a motivation that might not even be on the radar screen now.
But that didn’t stop the Democrats from disgracefully executing the Rahm Emanuel mantra of never letting a good crisis go to waste. While literally hundreds of victims remained in jeopardy, the Democrats fell all over themselves to get to the microphones to blast the GOP and NRA as complicit in the shootings and demand that Congress “do something” about gun control. Obama led this charge when he gave permission to use events like this as political platforms immediately. He argued, why not play politics when politics is needed to spur action, regardless of how it might impact those still suffering and concerned about their loved ones? It may raise money for the campaigns, but I don’t get how the Democrats doing this can look themselves in the mirror.
I’m a results guy. Using the emotion of the moment purely for political purposes, particularly when none of the vague proposals to address gun violence have a prayer of getting any positive result, is an insult to those affected by the shooting. I’m also a strong Second Amendment supporter, but not a purist. I have no problem with “common sense” gun restrictions, but at least consider those that might be effective, not just try to score political points.
The timing might be off, but there is a proposal from a Democrat to ban the “bump stock” modification to semiautomatic rifles that allow the weapons to approach full-auto rates of fire. Since full autos are banned, and rightfully so, this seems like a good common sense proposal that would have my support. But like the provision a couple years ago to ban those on the terror watch or no-fly lists or those with psychological problems from getting firearms, the devil will be in the details.
No one trusts anyone in this debate because, for reasons that elude me, the Left seems to have a goal of eliminating private firearm ownership. It doesn’t ever put it that way, but the restriction proposals it regularly makes only work if they move us in that direction. It might seem logical that someone on the watch list or under psychiatric care should not be able to buy a gun, but then how does one get on that list, and what criteria apply to the mentally ill? It might be used in excess by those seeking only to prevent additional gun ownership, and once on a list, you can’t get off. Maybe farfetched, but no one wants to give an inch because of where the slippery slope might lead. Until the trust issue gets resolved, common sense actions are going nowhere.
Except for the bump stock proposal, not one of the multiple additional gun restrictions that have resurfaced like rote from the Democrats would have made any difference in stopping the Vegas shooting. It may sound good, play well with the Democrat base and even sway a few others, but it does nothing to solve problems. There will be plenty of time to consider actions that might be effective, but for now, the Democrats should follow Trump’s lead and put all energies into caring for the victims and their families. Anyone who has lost a loved one in a sudden and random event will know what I’m talking about.