His critique of the House Republican tax reform plan in a recent edition—which he correctly notes has earned the enmity of the retailers and petroleum refiners, along with the apparel, tourism, and higher education industries, not to mention the Koch brothers—is that it is merely a feint to extract campaign contributions from the handful of companies that have thus far voiced support for the plan. Perhaps I have learned nothing in my two decades in Washington, D.C., because I have always assumed that crass congressmen using legislation solely to raise money would propose bills that pleased wealthy interests instead of angering them, and thus far the opposition appears much larger, and traditionally Republican, than those that stand to benefit from such a change.
Kudos to the Wall Street Journal’s Holman Jenkins for proposing a new corollary to public choice theory: namely, that actions objected to by special interests are motivated by a desire to raise campaign money from special interests.
One friend who handles tax policy issues for a member of the tax‐writing committee told me he has spent the last two months of work almost exclusively in meetings with entities objecting to the House plan. How a member’s office could channel such anger into campaign contributions is beyond me.
Jenkins also dismisses the plan’s provision to move the country closer to something akin to a consumption tax system—a pro‐growth reform most economists approve of—by complaining that it doesn’t go far enough in that direction, and suggests that a better alternative would be to not move in that direction at all, an amazing journalistic sleight of hand.
And he laments the plan’s move to a territorial approach for the taxation of foreign‐sourced income—which would reduce the incentive for domestic companies to invest abroad—because the change will somehow reduce global tax pressures to reduce domestic corporate tax rates in the future. If a tax reform can’t occur because it will reduce the pressure for future tax reform, then I give up.
The House has proposed a bold pro‐growth tax plan that is audacious in scope and does indeed threaten all sorts of vested interests while benefiting consumers, taxpayers, and workers. To dismiss it as merely an attempt to curry favor and campaign dollars defies common sense and reason. That this blithe criticism of a genuine supply‐side tax reform comes from a columnist at the Journal, which has been the most important force for supply‐side tax reform for four decades, is distressing.