Tax reform talking points: Reality will tell the real tale
Depending on the viewpoint you accept, the tax reform promoted by the Trump administration and being passed by Congress is either a slick tax break for only the richest among us or an historic, overdue payback to almost all Americans.
Those were the wildly disparate party lines championed by boosters and foes of the nation’s first major tax reform in three decades.
This much is certain: In the months ahead, paychecks are going to prove one of these arguments. Our own sense matches that of nonpartisan estimates that, starting in February, 80 percent of all Americans are going to see more money in their paychecks and more Americans than ever are going to be exempt from paying any federal taxes at all.
Even if that is reality, foes of the legislation will point to estimates of increases in the national debt of $1.5 trillion over 10 years that some have projected with this tax reform. It seems overblown, given how accepting these same people were of a $10 trillion debt increase over an eight-year period during the Obama administration.
Lost in all the negativity is the great X Factor in the entire tax reform gambit – the nation’s economic growth. If the nation’s economic growth is just a few tenths of a percentage point greater than the very conservative estimates attached to the debt forecast, the debt not only disappears but a dent can be made in the overall national deficit.
Each quarter of this administration – which has millions of doubters – economic growth has outpaced estimates and blown away the numbers of the previous administration. And the theory behind reduction of the highest corporate tax rate in the world is that it will produce economic growth in the form of business and industry expansion within the nation’s borders and a return of business and industry formerly shipped outside the United States to avoid an unfavorable tax climate.
What part of the talking points becomes reality? The next several months will tell the tale.
For now, our guess is that many Americans will be glad to see the federal government taking less of their paychecks in the months ahead.