Economist Stephen Moore says Republicans should have delivered tax cuts months ago, and will suffer if they can’t deliver by year’s end.
The Republican tax reform plan is “not much different from the plan Larry Kudlow and I helped put together for then-candidate Trump,” the Heritage Foundation economist told The Daily Caller’s Vince Coglianese in an exclusive interview. “My only frustration, Vince, is we put that plan together almost a year-and-a-half ago, and now Republicans just a week or so came out with their new version of this tax plan and it’s not much different from that.”
“So, in other words, they kind of wasted nine months. My frustration — we should’ve gotten this tax cut done a long time ago.”
The Republican plan, Moore explains, accomplishes three things in particular: cutting business taxes, allowing companies to bring money back to the United States, and cutting taxes for “working class Americans.”
President Trump had spent months urging a 15 percent business tax rate, but the plan released in late September called for a 20 percent rate, which Trump now says was by design.
Moore still prefers 15 percent.
“That’s the one thing I don’t like about this plan!” Moore exclaimed when asked about the change. “Trump is a master negotiator, so he started at 15 probably hoping he would get it 20. My worry though, Vince, is OK, now we’re at 20. Is it going to get to 25, 28?”
“We’re at 35 federal and 40 as a nation. The rest of the world is on average just about 20. So we’re at about a 20 percent competitive disadvantage for every American company. It’s unpatriotic to support something like that. You don’t have to be liberal or conservative. If you want American jobs, let’s have the most competitive tax system.”
While much of the Republican tax plan calls for across the board cuts, some conservatives do worry that the middle class could face a tax hike.
The Trump tax plan also calls for a change to the number of brackets, from seven to just three: 12, 25, and 35 percent.
Sen. Rand Paul has expressed concern that some middle class Americans will face a hike because they’ll lose their deductions while staying in the 25-percent bracket.
“The only sticking point I’ve had is a detail,” Paul told the Fox Business Network Friday, “but it’s an important detail: if you keep the middle rate at 25% and you get rid of two big deductions, how do we prevent the middle class from having a tax increase on this?”
Moore acknowledges that some people will end up paying more under the current plan.
“If you take huge amounts of deductions and credits, you probably will pay more, because you’re not paying your fair share right now, frankly. We believe everybody should pay the same rate, but you should pay that rate.”
One of the reasons some middle class taxpayers would see a bump is because they live in high-tax states, and Republicans are aiming to get rid of the state and local tax deduction.
“There are probably some people in these high-tax states like my home state of Illinois, New York, or California, who may in the short term pay higher taxes,” Moore said. “I agree with Rand by the way. I think we should fix this, make sure nobody pays any money. We want to make sure everybody gets a tax cut and nobody gets a tax [increase].”
Moore says he gets that everybody wants their tax cut, but his primary goal is to get the economy moving.
“I was in a taxi cab the other day and this Guatemalan tax cab driver recognized me and he wanted to talk about the Trump tax plan and I said, ‘Well, what do you think about it?’ and he goes, ‘Show me the money!’ And I think that is a lot of the attitudes, but, to me the tax cut for the individuals and families is secondary to getting the economy moving.”
For Republicans eager to push through the tax package, the next step is to pass a critical Senate budget resolution.
“If they don’t pass the budget resolution that makes room for this tax cut, we’re done,” Moore declared. “It’s finished. It’s over. So we have to get to 50 votes on this budget resolution. Right now, according to my count — I’ve been talking to Mitch McConnell about this — they think they’re at about 47.”
“So we’ve got to find a way to try to get Susan Collins, and Lisa Murkowski, and who knows with John McCain, but Rand Paul, as you mentioned, is still a potential.”
Following Moore’s interview with TheDC, Collins told ABC’s “This Week” that she’s now “likely a yes on that budget.”
According to Moore, the time for more Republicans to get to “yes” is quickly running out.
“We’ve got to put the pressure on these Republicans. I mean, it’s a gut check moment for the party. It’s an existential moment for the party. If they can’t deliver on this tax cut — this year, I’m not talking about 2018, this year before Christmas — I think, Vince, that they are going to lose the House and Senate.”
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