GOP leaders are hoping to reveal their tax reform package on Thursday, having already delayed it. However, infighting has already made tax reform an uphill battle.
The Obamacare repeal failed. Then the Obamacare repeal and replace collapsed. In both instances, it was Republican infighting that led to the collapse of both efforts, rather than Democrat resistance. Outside of health care reform, the Republican Congress has failed to be productive by nearly every measure. Now, the Republican tax plan is already facing immense headwinds, and it hasn’t even advanced past the Ways and Means committee.
The last several years have seen both the House and Senate grow increasingly unproductive, with each new Congress setting a new low bar. So far, the current Congress is on track to be the most unproductive Congress in over 160 years. Outside of disaster relief, the current Congress has failed to pass anything of note.
So far, tax reform looks like it’s going to be the next big failure. Congress is already behind on introducing its tax reform proposal. In and of itself, that might not be such a big concern. Delays are common. However, most of the reports coming out of Washington hint at more of the same old, same old: Republican infighting has already fractured support with various camps refusing to give ground.
So far, the current Congress is on track to be the most unproductive Congress in over 160 years.
As with the Obamacare repeal, the Republican party has been promising tax reform for years. The “only” thing the GOP needed, according to Republican leaders, was control of all three branches of the government. Yet even with the White House and both branches of Congress under Republican control, tax reform may prove elusive.
This isn’t because Republicans are scrambling. The Ways and Means committee has been interviewing experts, holding hearings, and arranging working groups for years. Low taxes are also a key tenet of the Republican platform. If there was going to be an easy victory, or at least a policy effort that would unite Republicans against Democrats, it’d be tax reform. Right?
Problem is, tax reform will create winners and losers. Meanwhile, America’s finances are already in poor shape. The last time the Republican party pushed through a significant tax package was during the Bush administration, when the United States was enjoying surpluses and low public debt. Now, debt exceeds the national GDP.
This isn’t because Republicans are scrambling. The Ways and Means committee has been interviewing experts, holding hearings, and arranging working groups for years.
Republicans are aiming to cut about $5.5 trillion in tax revenues. According to some, this money would then flow back into the economy, stimulating economic growth. However, the extensive tax cuts during the Reagan administration failed to generate as much economic growth as hoped, forcing Reagan to raise taxes.
Worse yet, America’s poor public finances are making it more difficult, if not impossible, to raise taxes without offsetting funding cuts. Cutting trillions of dollars worth of spending, however, is certain to upset powerful lobby groups and blocs of both Democrat and Republican Congress members.
Raising revenues elsewhere, such as eliminating property tax deductions, could hurt middle-class voters. This could cost the GOP at the polls. So far, pushback over these cuts has already sunk a proposed elimination of said property taxes. This means revenues will either have to be raised or expenditures cut elsewhere.
No one is looking to give up their share of the pie. Susan Collins, a Republican senator from Maine, has already signaled opposition to tax cuts for the wealthy. Meanwhile, the GOP is unlikely to consider spending cuts to the military and Medicare owing to the political ramifications. America’s infrastructure is already in dire shape, making cuts there risky. Add it all up and the GOP is going to struggle to pay for tax cuts.
As a result, infighting has already boiled over within the Republican party, and tax reforms haven’t even been unveiled.
