The tax reform plan released on Thursday by House Ways and Means Committee chairman Kevin Brady and with the blessing of Speaker Paul Ryan, is a thing of economic beauty. It cuts tax rates across the board, eliminates the death tax and the alternative minimum tax, makes the U.S. Corporate tax system competitive and does all this without raising the deficit. Well done.
Now, maybe Donald Trump and Paul Ryan can forge a tax reform alliance that could be the beginning of a beautiful relationship. I’ve been part of a team helping refine Mr. Trump’s tax plan, and while the details are still being ironed out, it’s not spilling the beans to say that the two Republican leaders pretty much see eye-to-eye on how to reform the IRS code.
Trump is a supply side tax cutter. Ryan, who worked for Jack Kemp for years, is now carrying his mentor’s torch for lower rates and more growth. Perhaps it’s time for them to put their differences aside and play on the same team.
A Trump-Ryan plan would not be an unprecedented partnership. Ronald Reagan largely borrowed from the House-Senate Kemp-Roth bill that had been the leading GOP tax cutting plan in the late 1970s. The Reagan-Kemp-Roth bill became the law of the land in the Gipper’s first year in office.
The fact that the plans were so similar in design sped up the process of actually enacting what was then the biggest tax cut since the JFK years. We now know the tax bill was a spark plug for rapid growth over the rest of the decade.