The group of congressional Republicans and Trump regime officials negotiating "tax reform" behind closed doors announced yesterday that Paul Ryan's border tax is dead.
A statement Thursday from the so-called Big Six -- which includes House Speaker Paul Ryan, Ways and Means Chairman Kevin Brady, White House economic adviser Gary Cohn, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell and Senate Finance Committee Chairman Orrin Hatch -- said due to the unknowns associated with the border-adjusted tax, the group “had decided to set this policy aside in order to advance tax reform.”
“And we are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base," the statement said.
The "unknowns," or known-unknowns if you prefer, may include Paul Ryan's lofty estimation that implementing a border tax would increase the value of the dollar enough to offset the increased price of goods for average consumers. Ryan, without any evidence to support it, believes the relative value of our currency would help us cope with higher bills at the grocery store.
That was a big "unknown" included in Ryan's plan, but so was his estimation that implementing a border tax would raise over a trillion dollars in revenue, as if exemptions and carve-outs wouldn't eventually erode that number.
Now, a border tax was not the only way Paul Ryan proposed paying for a massive package of tax cuts for the rich, also known as "tax reform," but it was a major piece of it.
Paul Ryan's plan calls for implementing a border tax and cutting spending, but it also relies on a handful of magic asterisks
If you take away the border tax and assume that Ryan's magic asterisks will never materialize, and if you assume the spending cuts necessary to pay for the enormous tax cuts for the rich will be too unpalatable to pass, all you're left with is deficit-financed tax cuts.
I don't want to push my luck and pronounce "tax reform" dead right now, but if they do pass something I doubt it will look anything like their original proposals.
Congressional Republicans envision themselves passing all of this, among many other things, before the next fiscal year begins on October 1st. Congress will soon depart for recess and when they return in September they'll have just a few weeks of session to fund the entire federal government, raise the debt ceiling, wage another miniature war against Obamcare, and reform the entire tax code. And I'm probably leaving something out.