Robert Novak said, “God put the Republican Party on earth to cut taxes. If they don’t do that, they have no useful function.” Since they were also put on earth to repeal Obamacare, and failed to fulfill that divinely-appointed role, they must enact fundamental tax reform if they want to maintain their majorities.
We have had Obamacare since 2010, and we have not had major tax reform since 1986. Doing anything on Obamacare through reconciliation, which only requires 51 Senate votes, is off the table. That ship has sailed.
Republicans have widely proclaimed their intent to pass tax reform this year, and they are behind schedule. There was an ambitious timeline, and it has been delayed multiple times. Now Republicans’ backs are up against the wall. Time is almost out on this promise, too.
What’s the holdup? Republicans are supposed to love hacking away at tax rates and growing the economy like a fat kid loves cake.
The grassroots conservatives are happy with President Trump’s appointment and the Senate’s confirmation of Supreme Court Justice Neil Gorsuch; they are very glad to see Trump taking the axe to some significant regulatory red tape. But they are beyond frustrated that Congress did not pass anything that even smells like Obamacare repeal.
Republicans in Congress do not seem to realize the hot water they will be in during the 2018 election if tax reform does not pass this year, if they don’t do what they were supposed to do, what they promised to do. Conservative grassroots activists have worked hard to elect people who promised they really wanted to repeal Obamacare. That was a lie for more than a few members of the Senate and many in the House.
The ballot-box backlash will be very strong unless there is a big win on tax reform, a win that simplifies the tax code and allows most people to file individual taxes easily, without having to pay a tax preparer.
To save their skins, Republicans should dramatically simplify the tax code, reducing its length and complexity by orders of magnitude. This will tend to broaden the base (the number of people paying taxes). This will ensure big corporations do not pay 0 percent.
Republicans should reduce and consolidate individual tax rates, and lower corporate and investment tax rates. We should also get rid of the perverse incentive to move ingenuity abroad and keep it abroad.
Members of Congress who want to win re-election as Republicans should make sure that the tax reform is a fundamental reform, not unpaid-for tax cuts. A transparent, easy-to-follow tax code will save Republicans at the polls in November.
Not only would this be a victory for a better tax code, but policy wonks will be able to explain and extrapolate how economic growth will rise. If Republicans do tax reform before the end of 2017, the impact will be felt by everyone in the first and second quarters of 2018.
With a policy victory to show for giving Republicans control of the legislative and executive branches and a palpable sense of a growing economy with higher levels of employment and rising wages, people who have voted Republican in the last decade are less likely to turn on those who formerly gained their support while pounding on their chests and saying “Repeal Obamacare!”
Without a big win on tax reform, officials will be going back to constituents asking for another chance. That dog won’t hunt.
Adam Brandon (@adam_brandon) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is president and CEO of FreedomWorks.
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