I recently addressed the idea that Republicans should scale down their tax reform ideas and just push through a tax cut. This idea is gaining steam following frustration with the Obamacare repeal debacle, but it\u2019s fraught with two major problems.<\/p>\n
I\u2019ve already discussed the first problem. We must<\/em> get rid of the cronyism embedded in the tax code\u2014or at least a big chunk of it\u2014and just cutting rates will keep everything intact. This is why the corporate cronies are pushing the idea of kicking the tax reform can down the road. They benefit from the current system at taxpayer expense and they don\u2019t want reform anyway.<\/p>\n Real reform and tax simplification means cutting social engineering from the tax code. Social engineering uses tax funds to promote or discourage certain types of business activity. The winners from the current system don\u2019t want it to change. They usually claim to favor tax reform and simplification while adding a quick \u201cbut\u201d that exempts them from the actual change.<\/p>\n The second problem is a political one. Individual tax cuts almost always favor lower- and middle-income brackets for political reasons; politicians don\u2019t want to defend \u201ctax breaks for the rich.\u201d Likewise, tax hikes usually hit middle- and upper-income earners for the same reason. Over time, tax cuts and increases shift the tax burden disproportionately to middle and high earners. This has already happened, which is why about half of wage earners don\u2019t even pay federal taxes and they don\u2019t understand why their healthcare can\u2019t be financed by those who do. The tax cut tax\/hike cycle must be broken, and this requires a radically simple system, something close to a flat tax.<\/p>\n For these reasons, I implore real conservatives and libertarians to stand their ground and insist on real tax reform. Short cuts just won\u2019t do.<\/p>\n","protected":false},"excerpt":{"rendered":" I recently addressed the idea that Republicans should scale down their tax reform ideas and just push through a tax cut. This idea is gaining steam following frustration with the Obamacare repeal debacle, but it\u2019s fraught with two major problems. I\u2019ve already discussed the first problem. We must get rid of the cronyism embedded in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/1145"}],"collection":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1145"}],"version-history":[{"count":0,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/1145\/revisions"}],"wp:attachment":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1145"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1145"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}