Op-Ed

What will Trump’s tax reform do for him?

The Speaker of the United States House Paul Ryan makes closing remarks as US Senate and House Republicans announce the new tax reform plan endorsed by President Donald J. Trump in the U.S. Capitol Sept. 27, 2017 in Washington, D.C.
The Speaker of the United States House Paul Ryan makes closing remarks as US Senate and House Republicans announce the new tax reform plan endorsed by President Donald J. Trump in the U.S. Capitol Sept. 27, 2017 in Washington, D.C. TNS/CNP

Score another first for Donald Trump. He alone has had the brass to propose a “tax reform” while hiding his own tax status in mirrors, mist, smoke and double talk. Trump, be it recalled, was the first presidential candidate in three decades to refuse to disclose his tax returns. His excuse was an IRS audit (no surprise there!), although no IRS rule forbids such disclosure.

The natural question is what he is hiding – and, more to the present point, what personal benefits the fine print of his “reform” would confer. But pending such disclosure, his pleas for tax reform – featuring the usual GOP reductions in corporate taxes and increases for some middle-income taxpayers – should be ignored. Indeed, the taxpaying public deserves to know that there are other sound reasons to defer this spur-of-the-moment idea. Tax “reform” and/or “simplification,” campaign goals for years, are more likely to result in tax complication.

A brief glimpse at the mechanics of taxation would show why. Our dysfunctional Congress has laid aside traditional mechanics of sound legislation – including systematic hearings and authoritative testimony. Note Sen. John McCain’s stated reasons for opposing the flimsy health-care bill and his plea for a return to “regular order.”

Both houses have been balkanized in recent years into petty centers of power. Fifty years ago, congressional power was concentrated in a few potent committee chairmen repeatedly re-elected to safe seats, and maintained by the “seniority” system that made them almighty and their committee colleagues peons.

Much was objectionable in that system, but its salient benefit was the well-honed expertise of potentates (known as “bulls”), especially in the House of Representatives, which took pride in legislative craftsmanship. The House, it was said, knew how to write good bills, which the strutting peacocks of the Senate need only rubber-stamp. (The present writer can speak with some authority on this point, having done extensive legwork in the House for a Harper’s Magazine piece in 1969. He did not find House members shy in their claims.)

That far-off legislative world is, in any case, gone with the wind. Congress is now an aggregation of micro-dot subcommittees, each with its own functions, constituencies and lobbies. By one recent estimate, there are more than 8,000 lobbies in Washington today, and probably more, each with its own targeted subcommittee. That is where the crunch of legislation occurs, when and if it occurs. The consequences – especially in so sensitive an area as taxation – are obvious and drastic. Consider, for instance, that the former chairman of the House committee with jurisdiction over pharmaceutic drug manufacturing and marketing, a congressman from Louisiana (famously described as “the westernmost of the Mediterranean states”) recently left his post to become the multimillion-dollar head of the Big Pharma lobby in Washington.

Any tax “reform” bill, no matter how coherently conceived, is likely to be mangled and manipulated in the secretive machinations of subcommittees. Such slight coherence as it might begin with – should either house depart from current practice to entertain hearings and testimony – is sure to vanish.

Meanwhile, please note that Donald Trump’s “reform” plan boasts a special outrage – eliminating the federal deductibility of state and local taxes. Not even Trump is brassy enough to propose the end of mortgage deductibility; it is too popular and too deeply entrenched. His aim is to increase the federal monopoly of tax revenues at the expense of state and local budgets. This would, of course, deflect some chronic borrowing by pre-empting traditional local and state tax sources. Having made a pluperfect mess of the federal budget (where over 20 percent now goes to debt service), Uncle Hog proposes to shrink budgets that are usually constrained, as in North Carolina, by constitutional balanced-budget requirements. Ask your friendly N.C. legislator whether he or she supports this Washington tax grab.

Donald Trump, hungry for a legislative triumph at any price after a long row of flops, should be put on notice that no member of Congress will consider his “reform” unless he discloses his own tax returns so that we can see what personal benefits he expects. Given his and his family’s gross flouting of traditional proprieties of public service, they are likely to be substantial.

Contributing columnist Edwin M. Yoder Jr. of Chapel Hill is a former editor and columnist in Washington.

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