The U.S. House Republican tax plan released last week is a lot like Christmas. There are many things to like, such as doubling the standard deduction to $24,000. Most folks use this because they lack enough deductions to itemize or flat don’t have the time to do so. And there’s cause for rejoicing at what’s not in the bill, including a stubborn proposal to cap tax-deferred savings in employee 401(k) plans — wildly inconsistent when Texas Republicans seek to pass a state constitutional amendment to encourage personal saving habits this week and some Capitol Hill Republicans want to overhaul Social Security.
And while it may or may not benefit the little guy, Republicans’ proposal lowering the corporate tax rate to 20 percent from 35 percent makes good sense in a fiercely competitive global economy — and we’re in one here in Texas. We also appreciate some of the nuance in the bill, including keeping the deduction on home mortgage interest. Granted, it caps that deduction at $500,000, down from a million bucks, and Realtors and home builders have gone berserk. But data indicate less than 3 percent of such mortgages are more than $500,000. Rich folks don’t need tax deductions to help pay for their expensive homes, including second homes.
Yet, for all of this, two key questions loom. And given the tea party seems to have gone mute lately, we’ll ask: Is this plan fairly equitable in laying down taxes? And what does it do to the national debt? Already, it’s apparent there are winners and losers, some more concerning than others. For instance, it wipes out a tax deduction for medical expenses exceeding a tenth of a taxpayer’s income. Targeting the old and sick seems a strange pursuit for a party that loudly claims to be pro-life. Meanwhile, the tax plan would allow fetuses to have college savings accounts.
More disturbing is that, after eight long years of hearing Republicans rant about free-spending Democrats adding to the now-$20 trillion national debt, we have a Republican Congress and a Republican president who propose adding $1.5 trillion or more to the debt over 10 years. Even the business tax deductions Republicans have correctly removed would only pay for a corporate tax cut at a rate of some 28.5 percent — not 20 percent. If the tidal wave of economic growth spurred by these tax cuts actually happens, it would be historic. In short, skepticism is justified.
Of course, all this is only the beginning. The Senate has yet to deliver its package of tax winners and losers. That said, our concerns go beyond what’s to like and not like in the GOP tax plan. Leadership means dealing with the challenges that arise — not the ones you’d particularly like to tackle. And with billions of dollars needed to dig Texas, Florida and Puerto Rico out of massive storm rubble (and Texas Gov. Greg Abbott badgering the federal government for more and more in relief aid) and with the president warning us that military confrontation may well be ahead (involving North Korea and Iran), Republicans should ask themselves if this is the time for overwhelming tax reform that digs us deeper into debt. Trying to fight two wars while giving tax cuts during the last tumultuous decade didn’t work out well in the final analysis. Has history taught us nothing?