Tags: blitz | tax code | reform | zero basing

Blitzing the Tax Code

Blitzing the Tax Code
President Donald Trump arrives to speak about the need for tax reform at Andeavor Refinery, September 6, 2017, in Mandan, North Dakota. (Brendan Smialowski/AFP/Getty Images)

By and Friday, 15 September 2017 05:03 PM Current | Bio | Archive

With the debate over tax reform once again elbowing its way onto the front pages, the overwhelming response of America’s citizens is MEGO: My Eyes Glaze Over. Sure, every now and then someone mentions how great it would be to have a simple, transparent, pro-growth tax code. Everyone cheers. Then we turn the page, where they explain why we can’t get there from here.

Why can’t we get the tax code Americans need — and deserve? The answers come in two languages: Washington gobbledygook and partisan sniping. The Washingtonian answers hinge on Senate rules and CBO scores, filtered through differing lenses of tradition and practice. The partisan answers blame Democrats for marching in lockstep opposition and Republicans for failing to march in lockstep support.

At the end of the day though, the problem is simple. Republicans have agreed to play by rules that say you can cut taxes, but you can’t cut government revenues. That means that for everything you lower, some hole elsewhere must be filled. Most of the deep holes are politically popular. Examples? The deductibility of State income taxes, mortgage interest, and certain employee benefits (like health insurance premiums) top the list — but there are plenty of others.

Many Republicans are squeamish about filling such politically popular holes. It’s a safe bet that Democrats will hammer them if they do. And without their votes, a simple, transparent, pro-growth tax bill has no chance of passing.

Unless, of course, the Republican leadership can do one of two things: Change the rules or devise a new strategy. There are plenty of good ways to change the rules, and plenty of proposals on the table. But they’re a snoozefest: MEGO. Besides, too few Republicans are bold enough to push through a really effective rule change.

Which leaves strategy. What do you do when the enemy has erected a mighty barrier to keep you out? Answer: Punch a hole through it, pour through to the other side, then fight an unprepared enemy. Does it work? WWI was fought in the trenches of Europe. In the 1920s, European military strategists prepared for the next war. An English General named Lidell-Hart came up with the idea of punching through. No one in England took him seriously. The French laughed even harder. They developed the mother-of-all-trenches, the impenetrable Maginot Line. The Germans thought Lidell-Hart was on to something. They put his strategy into play. Called it the blitzkrieg. Conquered France easily.

For the GOP — and America — to win without changing any significant rules, it must blitz its way through the impenetrable mess known as the tax code. How? It’s easy. So easy, in fact, that it’s already got a Washingtonian name. Zero-basing. It means eliminating everything, then bringing the pieces back to be justified one at a time. The GOP must zero-base deductions, exemptions, limitations, loopholes, and giveaways.

Here’s how it would work. The Republicans prepare a bill that eliminates every provision of the tax code that reduces government revenues. Every single one. Even the politically popular ones. Then, with a huge pile of savings stored up, the Republicans produce the simplest, most transparent, most pro-growth tax code imaginable.

Under the rules, simple majorities of both the House and Senate could pass such a bill. Given the vast number of politically popular — and in some cases, critically important — cuts, however, there is no chance that it would pass the Senate, and little chance that it would pass the House. Which is why the strategy needs a second line of attack.

Congressional leadership, including the chairs of all relevant committees and subcommittees, must make a solemn promise — a hard commitment — to their members. If you vote in favor of this revenue-neutral, rule-compliant, pro-growth tax reform, you may submit to us a list of cuts that you would like to restore. We promise to bring a floor vote on every submitted cut. They should extend that offer to every member of both chambers, Democrats as well as Republicans.

Then, of course, they should carry through on that promise.

How would this strategy unfold if put into play? The simple, pro-growth reform bill punches through the rules to reset the baseline. The GOP can then take political credit for reintroducing politically popular provisions like the mortgage interest deduction. The Democrats can either choose to join the GOP, providing majorities significant enough to overcome any procedural hurdles, or become the party opposing popular provisions. Democrats capable of seeing more than one move ahead will likely also join the original bill to get a seat at the table for reintroducing popular provisions — making the entire process bipartisan.

So that’s it. Punch through under the rules, then work on the other side. The end result will be a tax code that is far from perfect. That’s politics. But it will be far simpler, far more transparent, far more pro-growth, and far more bipartisan than anything we’ve seen in a long time.

Bruce Abramson is the President of Informationism, Inc., Vice President and Director of Policy at the Iron Dome Alliance, and a Senior Fellow at the London Center for Policy Research. Jeff Ballabon is CEO of B2 Strategic, Chairman of the Iron Dome Alliance, and a Senior Fellow at the American Conservative Union's Center for Statesmanship and Diplomacy. To read more of their reports — Click Here Now.

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With the debate over tax reform once again elbowing its way onto the front pages, the overwhelming response of America’s citizens is MEGO: My Eyes Glaze Over.
blitz, tax code, reform, zero basing
Friday, 15 September 2017 05:03 PM
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