Trump tax reform would repeal Death Tax

Posted on April, 27 2017, 16:10

On Wednesday, the 26th, the White House outlined the President's tax plan, and the Death Tax repeal remains part of it.

There was small correction I would have made to the White House presentation made by the National Economic Council Director Gary Cohn:  his comments regarding the Death Tax repeal stressed the fact that the unfairness of the tax kept farmers and others from passing businesses to the next generation.  That is undoubtedly true, but, he omitted the economic growth effects of the repeal that benefit the entire economy. 

We have heard before that Cohn has not espoused supply-side, pro-growth tax cuts in the past, meaning that he doesn't seem to "get" the fact that by changing the tax penalties on work, risk and investment, you get more work, risk and investment!  The Death Tax is a classic tax on these things and that is why repeal of the Death Tax will, when the pro-growth effects kick in, generate more revenue from corporate, income and other taxes for the government because of more jobs and wealth in the economy.

Let's look on the bright side and say that Cohn just didn't have time to go into the economic plusses of repeal and he and other Administration spokesmen will stress that in future.

This is leading to our upcoming fight.  We know that there are those in the GOP who will be willing to sacrifice Death Tax repeal because of alleged costs.   Unless Obamacare is repealed along with the estimated $1 trillion in savings that would bring, a tax reform bill will be too big a revenue loser in the minds of some.  (Democrat leader Chuck Schumer (D-NY) said the Trump plan "will explode the deficit.") 

We must first work to put steel in the spines of the House and Senate supporters of Death Tax repeal so they will not be swayed by those that want to sacrifice repeal because it's "score" shows it would increase the deficit.  That means that we need to show the political costs to them if, for example, they are willing to sacrifice Death Tax repeal in exchange for some other tax cut. 

We know, for example, that the White House is considering whether to advocate the elimination of the deductibility of state-imposed taxes.  We know that many high-tax states feel they do not have to consider reductions in their taxes because those taxes are today deductible against federal taxes.  Treasury Secretary Mnuchin said, "It's the states independent decision as to do what they want to tax" ... and not the federal government's responsibility to make those taxes less painful. 

I feel that the economic growth debate is crucial and will help us make sure that Death Tax repeal is in the final bill.  But the debate in the major media -- that Rush Limbaugh calls the "drive-by media" -- is already skewed against us.  The Washington Post had an article today, "Four Ways Trump's Tax Plan Would Affect Your Wallet."  Not unexpectedly, the Post did not report on how moving the economy from near-stagnation to a 4% growth rate would favorably affect everyone's wallet. 

I fully understand how reducing the tax rate on businesses will boost the economy.  I support that.  I understand how eliminating the alternative minimum tax will reduce effective tax rates on some of the most productive in our nation.  I support that, too.  But the American Business Defense  Council and our allies have a big task in showing Congress that repealing the Death Tax will create jobs, opportunities, wealth and, yes, tax revenues.

We're in this fight and we do have strong allies, you being a key one.  We are working now to burnish our business plan for the tax reform battle to come.

Remember the statement by the late great Senator Everett Dirksen:  "When they put my feet to the fire is when I start seeing the light."