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Trump's Tax-Reform Plan Takes Baby Steps in Right Direction

Trump's Tax-Reform Plan Takes Baby Steps in Right Direction
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By    |   Tuesday, 07 November 2017 03:09 PM

It has taken 104 years for Congress to enact an income tax system so complex, oppressive, and corrupt that reform was politically impossible.

That is until President Donald Trump.

However, reforming the federal income tax system is much like taking a journey of 1 million miles. It all starts with taking the first small step in the right direction.

Having high expectations for Congress to do the right thing for the taxpayers and the American economy is unwarranted.

If history is any guide, then having extremely low expectations of the establishment Democrats and GOP in Congress is entirely too optimistic.

Fortunately, Trump is not an ideological Democrat or Republic.

The ever-vitriolic Democrats would be critical of anything Trump even if the tax reform proposals were carved on stone tablets by the Creator and delivered from Mount Sinai.

The Republican political establishment is little better.

In the Senate, the GOP leadership’s first legislative Article of Faith is the filibuster rule and second the budget reconciliation rules.  The result is that any tax reform will be limited to finding the lowest common political denominator.

Remarkably, there is nearly universal agreement that the federal tax system should be reformed to make it easier for the government to collect money and simpler for the taxpayers to fork it over.

What is the best political strategy to get federal tax reform under way?

By taking baby steps to get the political momentum going in the right direction.

Requiring tax neutrality in tax legislation ends any hope for major tax reform.

So whatever Congress does it will be a matter of some taxpayers getting a reduction, for other taxpayers some tax increases, and any spending differences borrowed.

There is no reduction in Congressional spending proposed. The annual budget deficit increase because of this tax reform is limited to $150 billion annually—that is $1.5 trillion over ten years.

Which, in the scheme of things is not all that much money.

If just the blatant fraud in the Medicare, Earned Income Tax Credit, Child Care Tax Credit, and one or two other programs were closed, then there wouldn’t even be this budget deficit.

Tax reform metaphorically speaking, is mostly a matter of moving the existing deck chairs around on the ship of state.

However, some changes are proposed which help in ever slightly nudging the current full-blown income system towards a flat-tax system.

Tax relief for the private economy and business is long overdue.  Private business is the generator of jobs and capital in the United States whereas the government wastes capital and hinders private job formation.

The estate tax should have been repealed shortly after the close of World War I.  

The alternative minimum tax was a bad idea, to begin with, and only got worse. Repeal is long overdue.

Why should the American taxpayer pay for building an electric car when the free-market is much better at allocating resources?

The long journey to get true comprehensive federal tax reform will not happen in leaps and bounds.

At least Trump is leading Congress to take a small step forward in the right tax reform direction.

Denis Kleinfeld is known as a strategic tax and wealth protection lawyer, widely published author and creative teacher.

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The long journey to get true comprehensive federal tax reform will not happen in leaps and bounds. Trump is leading Congress to take a small step forward in the right tax reform direction.
trump, tax, reform, plan, baby, steps
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2017-09-07
Tuesday, 07 November 2017 03:09 PM
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