REPUBLICANS have spent years talking about the need to cut and simplify taxes. In June 2016 Paul Ryan, the Speaker of the House of Representatives, released a plan to do so. President Donald Trump released no fewer than three tax plans during his campaign for office. In September the administration championed an outline sketch it had agreed with Republican leaders in Congress. Yet as The Economist went to press, Republicans had delayed the release of their tax bill by a day, having failed to iron out the details.
The main problem the party will face as the legislation moves through Congress is finding the money to pay for tax cuts. Republicans like to talk about abolishing tax deductions, but every loophole has a lobbyist to defend it. Having given up on deficit-neutral reform, Congress has budgeted for the tax package to increase the deficit by $1.5trn. But the Tax Policy Centre, a think-tank, puts the likely cost of the package $2.4trn. The main source of revenue...Continue reading
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