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I like tax cuts because I\u2019m a curmudgeonly libertarian and I think people should have the first claim on the money they earn.<\/li>\nThis is why I wrote favorably<\/a> about Trump\u2019s campaign tax plan, and this is why I like Trump\u2019s new tax plan (with a few exceptions<\/a>).<\/p>\n But I confess that my heart\u2019s not in it. Simply stated, I don\u2019t think the new plan is serious.<\/p>\n If Trump really wanted a big tax cut, he would have a comprehensive plan<\/a> to restrain the growth of government spending. He doesn\u2019t.<\/p>\n If Trump genuinely wanted lower taxes, he would be aggressively pushing for genuine entitlement reform<\/a>. He isn\u2019t.<\/p>\n And Congress isn\u2019t much better. At least in the absence of leadership from the White House.<\/p>\n It\u2019s not merely that I\u2019m concerned lawmakers won\u2019t put the brakes on spending. And it\u2019s not just that I fear they won\u2019t enact much-needed entitlement reform<\/a>. I worry they\u2019ll actually increase the burden of federal spending. Just look what\u2019s happening as Congress and the White House negotiate a spending bill for the remainder of the 2017 fiscal year. The pending deal<\/a> would trade more defense spending for more Obamacare subsidies. Everyone wins\u2026except taxpayers.<\/p>\n In this profligate environment, it\u2019s hard to be optimistic about tax cuts.<\/p>\n By the way, I fully agree we would get more growth if Trump\u2019s tax plan was enacted. But the Laffer Curve<\/a> doesn\u2019t say that all tax cuts pay for themselves with faster growth. That only happens in rather rare circumstances<\/a>.<\/p>\n Yes, the lower corporate tax rate would have a big supply-side impact<\/a> (and there\u2019s plenty of evidence from overseas<\/a> to support that notion), but many of the other provisions of his plan are sure to reduce revenue.<\/p>\n Again, I don\u2019t lose sleep about the prospect of less money going to Washington. But you can be sure that politicians pay attention to that issue.<\/p>\n Which is why I\u2019m pessimistic. I don\u2019t think Congress is willing to approve a big tax cut.<\/p>\n The bottom line is that there are three possible outcomes.<\/p>\n Ultimately, I want to completely junk our corrupt system<\/a> and replace it with a simple and fair flat tax<\/a>. But for 2017, I\u2019ll be happy if we simply slash the corporate rate<\/a>.<\/p>\n Republished from International Liberty<\/a>.<\/em><\/p>\n Daniel J. Mitchell is a senior fellow at the Cato Institute who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.<\/p>\n This article was originally published on FEE.org. Read the original article<\/a>.<\/p>\n\n
\nDaniel J. Mitchell
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Yes, the lower corporate tax rate