Sorry, Dems: Trump economic train is leaving the station

As the Republicans turn to merging the House and Senate tax bills, the Democrats know that the Trump economic train is leaving the station without them. 

A new president brimming with economic optimism has produced massive deregulation and a resurgent economy in place of the stifling regulation and economic stagnation of the Obama years.  And that's before any big legislative victories.  The Democrats know that the Republican tax cut bill will add more fuel to the economic engines of the Trump economy. 

That's why Democrats say the Republican tax plan is "the end of the world."  They don't want a younger generation that came of age in the dreary Obama years, and has been taught that capitalism is bad, to see what a booming economy can do for their lives.  They don't want voters to see what economic freedom can do for job creation.  As a certain vice president once said, it's all about a three-letter word: jobs.

Former Trump economic adviser Larry Kudlow is focused on the growth potential of the business tax cuts, which the Democrats deride as tax cuts for the rich:

But the business tax cuts will generate an investment boom in the years ahead. And those cuts will bring economic growth back to its historical norm of three to four percent.

... An investment boom generating much faster growth will benefit everyone. Small businesses, new businesses, investors and wage earners will all prosper from a tax-cut-led investment boom.  Yes, a rising tide will lift all boats.

Anticipation of the Republican tax cuts has fueled, at least in part, the stock market boom since Trump's election.  Steve Moore points out:

By the way, the left also leaves out another impact of the tax cut that helps the middle class: a higher stock market. Some 54 million Americans have 401(k) plans. At least another 40 million have IRAs or pension plans. Where do you think that money is invested? Americans should look at their 401(k) accounts right now. They are surging in value in anticipation of the tax cut.

This has contributed to a surge of economic optimism and Christmas shopping and spending. You want to kill the economy – and Christmas? Follow Chuck Schumer and Nancy Pelosi's advice and kill the tax cut.

While Kudlow and others argue that the tax cuts will more than pay for themselves with much higher economic growth, the Democrats have seized on potential deficits to argue against tax cuts.  But, as Josh Kraushaar writes at National Journal, the Democrats' deficit argument "is one that's tough to make, given their reputation as a free-spending party."

Democrats are not exactly riding a wave of resistance to the tax cut bill, either.  As Kraushaar also observes, there is no "wave of liberal protesters and activists raising holy hell about the bill, as they did during the health care debate."

Adding the repeal of the Obamacare individual mandate to the Senate version of the tax bill saves more than "$300 billion over ten years in subsidies," thereby "providing savings for the tax cuts."  That also has the Democrats seeing the end, with one Democratic senator calling the "GOP tax bill 'a dagger in the heart of the Affordable Care Act.'"

Democrats don't want voters to know that the world will not end when the mandate ends.  Or, for that matter, when Obamacare ends.

Recall that Supreme Court chief justice John Roberts "rescued Obamacare in 2012" when the court ruled that the individual mandate penalty was actually a tax.  As Arkansas's Senator Tom Cotton, quoted at washingtontimes.com, says:

The Obamacare mandate was held by the Supreme Court to be tax. Whatever philosophical positions you may have had before that, that's the law of the land.

It's also the heart of Obamacare. And [repeal] allows us to pay for more tax cuts for working families and businesses that create jobs in this country, while at the same time avoiding a very punitive tax that falls squarely on working families and poor people.

With the House bill weighing in at 429 pages and filled with many arcane tax reform provisions, perhaps the best summary comparison of the House and Senate bills is found at forbes.com, page 1 and page 2.

Among the major issues to be reconciled between the two versions are:

  • The repeal of the Obamacare mandate is in the Senate bill only and should be included in the reconciled bill.
  • The new tax provisions for individuals are permanent in the House bill but expire after 2025 in the Senate bill to meet budget reconciliation rules.
  • The mortgage interest deduction is different in the two versions, with the home-building industry expected to push for the higher deduction in the senate bill
  • The tax treatment of pass-through business income, a major issue for Senator Ron Johnson of Wisconsin and others, differs in the two bills.
  • The corporate tax rate is cut from the current 35 percent to 20 percent beginning in 2018 in the House bill but is delayed until 2019 in the Senate bill.  Why would the Republicans have their biggest economy-booster kick in after the 2018 elections?  
  • While both versions contain a property tax deduction up to $10,000, the state and local income tax deduction has been eliminated from both bills.  Expect blue state House members to seek further compromise on that issue in the conference committee.

The two tax bills, which no Democrats have supported, must now be reconciled in a House-Senate conference committee, with the compromise bill to be voted on again in each body before being sent to the president for signing into law.

With deregulation and a resurgent economy paving the way for tax cuts, the Trump economic train is leaving the station without the Democrats.

As the Republicans turn to merging the House and Senate tax bills, the Democrats know that the Trump economic train is leaving the station without them. 

A new president brimming with economic optimism has produced massive deregulation and a resurgent economy in place of the stifling regulation and economic stagnation of the Obama years.  And that's before any big legislative victories.  The Democrats know that the Republican tax cut bill will add more fuel to the economic engines of the Trump economy. 

That's why Democrats say the Republican tax plan is "the end of the world."  They don't want a younger generation that came of age in the dreary Obama years, and has been taught that capitalism is bad, to see what a booming economy can do for their lives.  They don't want voters to see what economic freedom can do for job creation.  As a certain vice president once said, it's all about a three-letter word: jobs.

Former Trump economic adviser Larry Kudlow is focused on the growth potential of the business tax cuts, which the Democrats deride as tax cuts for the rich:

But the business tax cuts will generate an investment boom in the years ahead. And those cuts will bring economic growth back to its historical norm of three to four percent.

... An investment boom generating much faster growth will benefit everyone. Small businesses, new businesses, investors and wage earners will all prosper from a tax-cut-led investment boom.  Yes, a rising tide will lift all boats.

Anticipation of the Republican tax cuts has fueled, at least in part, the stock market boom since Trump's election.  Steve Moore points out:

By the way, the left also leaves out another impact of the tax cut that helps the middle class: a higher stock market. Some 54 million Americans have 401(k) plans. At least another 40 million have IRAs or pension plans. Where do you think that money is invested? Americans should look at their 401(k) accounts right now. They are surging in value in anticipation of the tax cut.

This has contributed to a surge of economic optimism and Christmas shopping and spending. You want to kill the economy – and Christmas? Follow Chuck Schumer and Nancy Pelosi's advice and kill the tax cut.

While Kudlow and others argue that the tax cuts will more than pay for themselves with much higher economic growth, the Democrats have seized on potential deficits to argue against tax cuts.  But, as Josh Kraushaar writes at National Journal, the Democrats' deficit argument "is one that's tough to make, given their reputation as a free-spending party."

Democrats are not exactly riding a wave of resistance to the tax cut bill, either.  As Kraushaar also observes, there is no "wave of liberal protesters and activists raising holy hell about the bill, as they did during the health care debate."

Adding the repeal of the Obamacare individual mandate to the Senate version of the tax bill saves more than "$300 billion over ten years in subsidies," thereby "providing savings for the tax cuts."  That also has the Democrats seeing the end, with one Democratic senator calling the "GOP tax bill 'a dagger in the heart of the Affordable Care Act.'"

Democrats don't want voters to know that the world will not end when the mandate ends.  Or, for that matter, when Obamacare ends.

Recall that Supreme Court chief justice John Roberts "rescued Obamacare in 2012" when the court ruled that the individual mandate penalty was actually a tax.  As Arkansas's Senator Tom Cotton, quoted at washingtontimes.com, says:

The Obamacare mandate was held by the Supreme Court to be tax. Whatever philosophical positions you may have had before that, that's the law of the land.

It's also the heart of Obamacare. And [repeal] allows us to pay for more tax cuts for working families and businesses that create jobs in this country, while at the same time avoiding a very punitive tax that falls squarely on working families and poor people.

With the House bill weighing in at 429 pages and filled with many arcane tax reform provisions, perhaps the best summary comparison of the House and Senate bills is found at forbes.com, page 1 and page 2.

Among the major issues to be reconciled between the two versions are:

  • The repeal of the Obamacare mandate is in the Senate bill only and should be included in the reconciled bill.
  • The new tax provisions for individuals are permanent in the House bill but expire after 2025 in the Senate bill to meet budget reconciliation rules.
  • The mortgage interest deduction is different in the two versions, with the home-building industry expected to push for the higher deduction in the senate bill
  • The tax treatment of pass-through business income, a major issue for Senator Ron Johnson of Wisconsin and others, differs in the two bills.
  • The corporate tax rate is cut from the current 35 percent to 20 percent beginning in 2018 in the House bill but is delayed until 2019 in the Senate bill.  Why would the Republicans have their biggest economy-booster kick in after the 2018 elections?  
  • While both versions contain a property tax deduction up to $10,000, the state and local income tax deduction has been eliminated from both bills.  Expect blue state House members to seek further compromise on that issue in the conference committee.

The two tax bills, which no Democrats have supported, must now be reconciled in a House-Senate conference committee, with the compromise bill to be voted on again in each body before being sent to the president for signing into law.

With deregulation and a resurgent economy paving the way for tax cuts, the Trump economic train is leaving the station without the Democrats.

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