This morning, an idea for Trump’s next big thing – tax reform – was revealed in a Washington Post article:
It proposed two different kinds of taxes that might allow Trump to cut personal income taxes for the rich and the middle class, as well as business and capital gains taxes – the Republican dream come true – without turning the whole country into an imitation of Kansas, where cuts in the income tax have been a disaster for citizens, business, and government.
The two kinds of taxes floated today are a Carbon Tax and a VAT Tax.
A Carbon tax would put a levy on all forms of carbon – oil, gasoline, chemicals, coal – which would also have the bonus impact of cutting carbon emissions, which cause climate change. It would be good for the planet.
In the rest of the world, this might make sense. However, in Trump’s America, where putting coal workers underground again is akin to a religion, it would go against everything Trump has preached. It would be a rebuke to those who think climate change is a hoax perpetrated by President Obama, former VP Al Gore and their pals in the scientific community.
So, as you can imagine, it did not warm Republican hearts. The idea of a Carbon Tax is dead on arrival.
Then there is the VAT, or Value Added Tax; which, if you have been to Europe, you already know about. It replaces not only sales taxes, but also most personal income taxes, by assessing a levy on every stage of the supply chain (business and consumer).
“The vast majority of other countries use VAT’s,” notes an article in Slate today, “but Republicans have a love-hate relationship with the concept because they think it has facilitated European social welfare states by hiding the true cost of singe-payer health care and other programs in the price of produce and T-Shirts.”
“Ronald Reagan once said,” continues Slate, “that a ‘value-added tax actually gives the government a chance to blindfold the people and grow in stature and size.’ Today you hear echoes of that from guys like anti-tax jihadi Grover Norquist.”
So the VAT, like Trumpcare, would split the Republicans between the moderate types and the ultra-right wing Tea Party Conservatives who think any tax, anytime, is a personal insult.
The result is that VAT is also more of a political problem for Trump than a solution.
The last thing Trump wants is to have the Freedom Caucus (the Tea Party and far right) and the Tuesday Group (Republican moderates) each pulling in opposite directions, resulting in – like Trumpcare – nothing getting done.
House Speaker Paul Ryan isn’t going to rush in to save the day either. His big plan, pushed both during the campaign and after, has apparently been jettisoned.
Ryan wanted a tax on goods coming across the border from Mexico, China, Korea or anywhere in which the U.S. has a huge trade gap. There would be no tax on exports – to boost American industry and keep the jobs at home – but it’s another non-starter.
If you shop at America’s largest retailer, Walmart, you know why. Most of what you buy there comes across one of those borders, often Mexico, so Ryan’s plan would mean raising prices on the working class.
That is not, as they say in DC, good “retail politics.” It would be hard to sell at election time.
So, as the Congress takes their undeserved two-week Spring break, don’t think they will return and fulfill Trump’s promise of tax reform that will please everyone. It isn’t going to happen. Even Paul Ryan seems to have grasped that.
What will happen is that the same paralysis and in-fighting that Trump has been unable to control will continue, and his agenda and poll numbers will continue to scrape the floor.
He may have dreams of what it would be like to emulate his Ruskie pal Putin and kill all his enemies, control the national media and run his so-called democracy as an authoritarian state, but that isn’t going to happen either.
It would be terrible politics, and an even bigger nightmare for the rest of us than Trump already has become – if that is possible.
It’s taxing enough just to have him as President.