Did Donald Trump sell the American people on a tax plan that cannot be implemented?
Where is the legislation? It has been weeks since Treasury Secretary Steve Mnuchin unveiled the highly anticipated and widely discussed “tax cut package.” Did the Trump administration immediately upon announcement of the plan submit draft legislation to the House Weighs and Means Committee for consideration? No, we have seen no legislation on the matter delivered from the Oval Office. Did the House Republicans read President Trump’s outline of suggested tax policy changes then take the football and run with it? The fact remains that weeks after the highly publicized “tax cut package” was announced there is no spot on the agenda in Congress for legislation which resembles Trump’s outline.
The “tax cut package” is just a four page outline of things he hopes to accomplish. There is no substantive action toward a law at this time. This type of form over substance policy presentation is a marketing tactic more than actual policy conception. During the 2016 Presidential election cycle Donald Trump was accused of many dastardly things. His opponents branded him as not serious or even worse a misogynist. However, the branding his opponents laid upon him did not stick because as a trained entertainer and promoter Donald Trump knows how to market. Over the past several weeks Donald Trump successfully convinced millions of Americans that his tax plan will benefit them by lowering taxes. The reality of perception is not fact. The support of the American people is important to the President’s agenda. Donald Trump has successfully sold the American people on a plan that does not exist.
Since we are discussing a plan which only exists on four pieces of paper and in the minds and hearts of Americans how does an analyst successfully detail the proposal? Most pundits on the left and right (of which I am neither) have taken to the old saw of bickering over the “rich getting richer” or “trickle down economics.” These types of analysis only serve to reinforce in the minds of Americans that a plan of substance is actually being considered. It is amazing to watch the talking heads on the cable networks blibber blabber on and on about a four page document.
Donald Trump’s four page “tax cut package” is a rough sketch of an outline to a major overhaul of the Internal Revenue Code. This rough sketch will require years of negotiation and compromise since it is tax policy change of the magnitude not seen since the Tax Reform Act of 1986. The last major tax reform law required five years of negotiation and multiple election cycles to complete. The foolhardy nature of today’s twenty-four hour news cycle is not capable of an attention span longer than a week. The type of overhaul proposed by Donald Trump will not happen during the 2017 Congressional term nor is it likely to occur during Donald Trump’s Presidency. If it took Ronald Reagan two terms to enact substantive tax reform why are we to assume that Donald Trump will be more successful?
What’s in this rough draft of a sketch that has everybody talking about tax cuts? Here is a summary of the entire four page document less the puffery about “Making America Great Again.” The tax plan eliminates all burden of income taxation for single filers earning less than $25,000 and married filers earning less than $50,000. The plan eliminates the Alternative Minimum Tax and reduces the number of tax brackets down to four. All businesses will see their income tax rate moved to a maximum of 15% and the death tax is abolished. President Trump also peppered in a little populism into the plan by sticking corporations, which have overseas earnings, with a new 10% tax in an attempt to force repatriation of earnings and Trump also vaguely promises to cut unspecified loopholes for some special interest groups.
There is only minimal reform to the tax code in Donald Trumps “tax cut package.” The only part of his plan which reduces taxpayer compliance burden is the elimination of the death tax. Unfortunately the death tax only applies to a very small percentage of the population who have several million dollars laying around after their death. Most Americans will still be forced to pay for tax preparation services or software and most Americans will continue their forced to dealings with the IRS.
Substantive tax reform which eliminates the need for the federal government to learn the intimate details of your personal and financial life is not in Trump’s plan. American citizens are currently required to provide intimate data (Social Security Numbers) to the IRS and the IRS is proven totally incapable of protecting the information from identity thieves. Reports over the years of hundreds of thousands of compromised social security numbers within the IRS database should be sufficient cause for the citizens to rise up and say no more. Unfortunately, most Americans today view tax compliance as a patriotic duty instead of the onerous authoritarian grip of the powerful central government.
The Trump “tax cut package” is little more than some added polish to the boot of government as it steps on you every April 15th. Tax day will come for all Americans whether or not Trump’s pipe dream of minimal reform takes shape. Donald Trump gets good marks on his report card because he has successfully marketed his tax plan as a tax plan instead of the inconsequential waste of four pages it is in reality. It sure is fun to listen to the pundits’ banter about Trump’s masterful marketing ploy. Congratulations Trump will Make America Great Again at least in the confines of your own psyche.
Anson Knowles is the host of the Alabama-based radio program The Anson Knowles Show Live, Local, Liberty Oriented Talk on 92.5FM/770AM WVNN and wvnn.com.