Tax bill a dream come true for some GOP wonks
For the large contingent of Washington supply-siders and tax-cutters, the sweeping tax overhaul that President Donald Trump is poised to sign into law this week has been a generation in coming — and the culmination of half a life’s work that started during Ronald Reagan’s 1980s.
Grover Norquist, arguably the best-known anti-tax activist in the country, started Americans for Tax Reform at then-President Reagan’s request to help marshal support for the 1986 tax overhaul. He’s been working ever since to rally support for more tax cuts.
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House Speaker Paul Ryan (R-Wis.) for years said his dream job was to be House Ways and Means chairman, a position that would have allowed him to quarterback the sort of tax revamp that his mentor, the late Jack Kemp, helped get through Congress in 1986.
When he became Speaker, Ryan said he was reluctantly passing the title of Ways and Means chairman, and the opportunity to focus attention on tax reform, to Rep. Kevin Brady (R-Texas).
Now, the 2017 tax revamp will bring the American tax system more into lockstep with those conservatives’ thinking than perhaps ever before — making the idea that what works for corporate America will work for the country at large a central plank of U.S. policy for decades to come, maybe even a generation or more.
“This tax cut and reform will drive further reforms and reductions for the next 50 years,” Norquist said Friday.
The corporate rate would be slashed from 35 percent to 21 percent under the GOP plan, which would also allow businesses to immediately write off investments for five years and scrap Obamacare’s individual mandate. In an extra bonus for the right, it also shrinks the deduction for state and local taxes, an incentive that mostly helps blue, high-tax states.
“This is a pretty historical moment for the conservative movement,” said Stephen Moore, another of those supply-siders, who has over the years worked at the Club for Growth, The Heritage Foundation and The Wall Street Journal editorial page.
“I’ve been in this game for 30-some years. This, if it passes, will be the single biggest policy triumph for conservatives since the 1996 welfare reform. It’s up there with the ’81 Reagan tax cuts,” added Moore, who’s an informal adviser to the president and, along with fellow supply-sider Larry Kudlow, helped then-candidate Trump craft his tax plan.
The start of the conservative tax-cutting movement is frequently traced back to 1974, when a young economics professor named Arthur Laffer met an equally young Dick Cheney, then a top aide to President Gerald Ford, at a restaurant. Laffer doodled on a napkin the case that cutting taxes can increase revenues for the government, a theory now known as the Laffer Curve.
That case is maybe most famously argued by Kudlow, who worked in Reagan’s White House and has spent more than 15 years defending its merits on CNBC. Perhaps even more importantly, Moore said, Kudlow worked overtime to pitch the GOP tax plan to skeptical Republicans like Sens. Susan Collins of Maine) and Bob Corker of Tennessee, both of whom now seem likely to back the measure.
It might be hard to imagine now, but the Republican Party hasn’t always been dominated by would-be tax cutters. Former Senate Majority Leader Bob Dole (R-Kan.) once joked that “the good news is that a bus full of supply-siders went off a cliff. The bad news is that two seats were empty,” according to “Showdown at Gucci Gulch,” the book about the 1986 tax overhaul.
But the supply-side theory eventually won out, if in fits and starts. Reagan’s 1981 tax package cut the top individual rate from 70 percent to 50 percent — with the rate getting down all the way to 28 percent in 1986.