Trump Might Be Wise to Discard 'Comprehensive' Tax Reform

Whether it happens before or after health care reform—the White House has been sending mixed signals—President Trump has consist-ently promised massive tax cuts for the middle class and businesses. He told an interviewer a few weeks ago, It will be the biggest tax cut since Reagan, and probably bigger than Reagan's.The president's plan is still being worked out, but based upon his previous statements and the blueprint for tax reform presented by House Republicans last year, it will likely contain significant cuts in individual rates, a consolidation of income tax brackets from seven to three, a doubling of the personal exemption for most taxpayers, a reduction in corporate income taxes from 35 percent to 15 or 20 percent, immediate expensing of business investment, reductions in capital gains rates along with the rates on income from pass-through businesses, and perhaps some form of a border adjustment tax. These proposals, if enacted, will undoubtedly reduce taxes for most Americans and, according to forecasters, should help to spur GDP growth from 1.6 percent in 2016 to a level closer to the postwar average of 3 to 4 percent per year.