ANOTHER ONE BITES THE DUST …
U.S. president Donald Trump has abandoned the tax plan he campaigned on last year, according to the Associated Press.
The wire service is reporting that Trump’s White House “is going back to the drawing board in a search for Republican consensus behind legislation to overhaul the U.S. tax system.”
Ah yes … “Republican” consensus.
Trump rolled out different variations of tax reform during his 2016 campaign, ultimately settling on a plan that would have compressed the number of federal income tax brackets from seven to three and cut the top marginal rate from 39.6 percent to 33 percent.
Trump also made it abundantly clear the passage of such tax relief was critical to achieving his lofty economic goals.
Now? Trump is having to adjust to the reality of GOP-controlled Washington, D.C., where no campaign pledge – not even the oft-repeated vow to repeal Obamacare – appears doable. Of course it was Trump who badly miscalculated during the Obamacare repeal fiasco – a mistake he then compounded by attacking fiscal conservatives who stood on principle in support of a full repeal of this collapsing law.
Obviously the news of this latest White House retreat comes as no surprise to our readers …
According to the AP, Trump is considering a payroll tax cut (well, a reverse of the recent payroll tax hike) and other lower/ middle income relief in an effort to get the consumer economy moving again. Good … those cuts are critical to empowering consumerism, which in turn is key to empowering a real (i.e. jobs and income) recovery.
The problem? There are sufficient numbers of liberal Republicans in Washington, D.C. who will insist upon these tax cuts being offset with “revenue enhancers.” In other words they will only support tax shift, not tax cuts – which severely constrains any stimulative effect to the economy.
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