Almost Everything Is Wrong With the New Tax Law - Part III
Second, the tax changes could have been designed to be distributionally neutral, as the 1986 tax reform was, or even progressive. But once you decide to concentrate on reducing the corporate income tax, giving a sizable tax preference to pass-through business income, cutting the estate tax, and lowering the top income tax rate, you are headed down a highly regressive road.
Third, a true tax reform would have been revenue-neutral—again, as the 1986 reform was. Some taxes would have gone up while others went down, leaving only a negligible effect on the budget deficit.
Fourth, a Congress truly focused on tax reform would not have thrust a completely unrelated dagger into the heart of ObamaCare. I refer to the repeal of the penalty that enforces the individual mandate. This mean-spirited provision is a first step toward “repeal without replace,” a foolish and cruel approach that Congress rejected last summer. Notice that the huge savings from this provision don’t come from cutting anyone’s taxes. They come, according to Congressional Budget Office estimates, from 13 million Americans dropping off the health insurance rolls over a decade.
And that’s just a hint of what’s to come. Already, Republicans are taking aim at other parts of ObamaCare, Medicare, Medicaid, food stamps and more. Class warfare? Yes, score the first round for the upper class.
https://www.wsj.com/articles/almost-everything-is-wrong-with-the-new-tax-law-1514416503
Mr. Blinder is a professor of economics and public affairs at Princeton University and a former vice chairman of the Federal Reserve.
= new reply since forum marked as read
It may be confusing that he has two topics: first, about the tax law itself, and second, what should have been done.
Each topic has its own First, second, third, and fourth. I tried to cut the whole opinion into three segments, more or less equal in size, but perhaps I should have cut it based on flow of reading.
Give it another try.
