At the risk of discrediting this article before it even begins I am going to pretend that I am an Independent Senator in the USA considering the current GOP tax plan. If you’re still reading – in my perfect world a sweeping tax plan includes many of the no-brainer policies that I’ve discussed in the past. This would include a full payroll tax cut and an increase in certain types of secondary market “investments” like capital gains and dividends. This would give every working American a tax break. But that’s not happening so let’s move on. Also, we need to accept an important point:
No one should be surprised that a Republican Congress is relying on supply side style tax cuts that will tend to benefit the wealthy and corporations and increase inequality. Yes, the evidence to support this style of tax cut is weak at best, but this is the Congress we have so let’s work with what we have and stop pretending that we might get a more progressive tax plan from a Republican Congress.
One more important thing here to remember. With all this policy debate we sometimes get bogged down in the idea that public policy steers the economy instead of the fact that the economy tends to steer public policy. This tax plan will have an impact on the aggregate economy, but let’s not go thiniking this is some sort of world changing policy that will completely change the direction of the economy.
With that out of the way let’s look at why this tax policy is better than some people think:
