Can the GOP be a blue collar party and the party of lower taxes? Here’s an idea from conservative writer Reihan Salam: Eliminate the ability to deduct state and local taxes from your federal income taxes (which primarily benefits rich Democrats from states like NY and CA) and replace it with a $2500 per child tax credit.
If there’s one thing that’s united Republicans since the Reagan era, it’s enthusiasm for tax cuts. But these days one gets the unmistakable impression that the Laffer curve dream has died. For one thing, the Trump administration has reportedly abandoned the ludicrously large tax cut the president campaigned on last year. And in an interview with the Financial Times, U.S. Treasury Secretary Steve Mnuchin has acknowledged the obvious, namely that it is vanishingly unlikely that Republicans in Congress will pass major tax reform legislation by August. There will be no big tax cut in Donald Trump’s first 100 days. There probably won’t be one in the first 1,000 days either.
Before you blame Democratic intransigence, as GOP diehards no doubt will do, keep in mind that Republicans could make use of the budget reconciliation process to pass a tax bill on a party-line vote if they’re so inclined. No, the problem is that while Republicans might agree on the virtues of tax-cutting in theory, they’re finding it awfully difficult to craft a tax overhaul they can agree on in practice. And if Republicans can’t agree on tax cuts, well, what can they agree on? It’s no wonder some are calling Trump a do-nothing president who will offer his supporters little more than symbolism.
What’s behind the GOP’s tax impasse? Republican lawmakers find themselves in a moment of ideological flux. Between 2008 and 2016, the highest-income white voters went from being far more likely to vote for the Republican presidential candidate than the average white voter to being far less likely. You could dismiss this as no more than a blip—a reflection of the fact that well-off professionals found Donald Trump to be an especially noxious figure—but the trend was already visible in 2012, when Mitt Romney, famous for being a wealthy white man, fared less well than Barack Obama among wealthy whites. The result, as Luke Thompson has argued in National Review, is that Republican leaders find themselves confronted with new class divisions within their coalition.
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