The GOP tax bill fell into place on Wednesday as the House and Senate reached a deal on a $1.4 billion tax cut. This is welcome news and marks the president’s first significant legislative achievement.
There are plenty of moving parts and the intricacies won’t be known until the weekend, but the measure lowers both individual tax rates and the corporate rate. It also nearly doubles the standard deduction, meaning savings for millions of middle-class families who don’t itemize their returns.
In addition, the Wall Street Journal reports that the bill shrinks the deduction for state and local taxes that has allowed high-tax states to disguise the true costs of their profligate spending. The Senate version eliminated the write-off, while the House capped it at $10,000 for property taxes. The compromise — designed to win over Republicans representing California and New York — limits the deduction to $10,000 total for property and income taxes, while helping to offset the hit by slightly lowering marginal rates for individuals. That’s a reasonable agreement.
Meanwhile, the corporate rate would be set at 21 percent. That’s higher than the 15 percent Donald Trump had sought and the 20 percent in both the House and Senate versions. But it’s still well below the current rate of 35 percent and should help make U.S. companies more competitive and foster the type of innovation and investment necessary for growth and job creation.
The bill has plenty of flaws. But, as the saying goes, the perfect mustn’t be the enemy of the good, particularly in politics. In the end — despite boilerplate Democrat whimpering about the “rich” — this is a debate over who should control a large pile of money, those who earned it or Washington bureaucrats. We’ll side with the former every time.