Saturday, April 01, 2017

Taxes will be their next fuck-up


For a long time, Conservatives, Republicans Reactionaries and Other Extremists have shown signs that actual governing was beyond their capacity. As they approach Tax Reform, fresh off the debacle of TrumpCare, those signs are fast hardening into certainties.
One conservative group produced colorful flow charts warning millennials that a “border adjustment” tax proposed by Speaker Paul D. Ryan would raise prices on “the Jose Cuervo tequila that’s in your happy hour margarita.”

Three days later, a second conservative group kicked off a lobbying campaign saying it would amount to a $1.2 trillion tax on seniors and the working poor.

The next day, still another group weighed in, issuing a news release that highlighted how Latinos would be “among those hardest hit” by the new tax on imports.

All three organizations share a common lineage: They are part of the political network overseen by Charles D. and David H. Koch, the billionaire conservative philanthropists. Now they are among a host of conservative organizations mounting a furious campaign against a new tax on imports proposed by House Republicans, imperiling what is supposed to be a centerpiece of the Republican tax overhaul effort.

Their opposition threatens yet another rupture with President Trump, some of whose advisers see the provision as a critical way to bring about tax reform while protecting American manufacturers.

The battle could not only jeopardize Mr. Trump’s second major legislative initiative, but also redefine the boundaries of conservative economic policy. Much like the failed repeal of the Affordable Care Act, the import tax is dividing conservatives, the business sector and some of the deepest-pocketed groups funding conservative politics. Along the way, it is exposing the broader ideological divide between nationalist policies embraced by Mr. Trump and the traditional small-government movement that his election ejected from the driver’s seat of Republican policy-making.

“Trump ran on a different set of economic issues than traditional conservative Republicans have,” said Stephen Moore, a fellow at the Heritage Foundation who favors the border tax on intellectual grounds, but said he had come to see it as a “poison pill” for broader tax reform.

“The baton has been passed on from Reagan to Trump,” Mr. Moore continued, “and there’s no doubt he ran on a much more populist economic message.”

The idea of a border adjustment tax has percolated among academic economists and in think tanks since the 1970s, as the United States considered ways of harmonizing its tax code with countries that use value-added taxes. Central to the plan is a provision that would tax imports at a rate of 20 percent while exempting exports from taxation. In theory, this would buttress domestic manufacturing, make American products more competitive with foreign goods and encourage American companies to bring home cash they have been parking overseas.
The idea of a value added tax applied at the border sounds simple on paper. The re-alignment of the tax system to implement it requires intellectual ability probably far beyond the capacity of the poo flinging monkeys in this sessions Republican caucus. We can only hope they do no real damage before the whole thing blows up.

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