April 27, 2017


Donald Trump's Massive Corporate Tax Cut Literally Cannot Pass Congress (Jordan Weissmann, 4/26/17, Slate)

[U]nfortunately for Trump, his plan to slash corporate tax bills has a fatal flaw: It's probably forbidden under the Senate's rules, and thus entirely incapable of passing Congress.

At least, so suggest some recent comments by George Callas, who serves as senior tax counsel to House Speaker Paul Ryan. Speaking at a panel event in Washington last week, which was previously reported on by the New Republic's Brian Beutler, Callas dismissed the idea of passing a corporate tax cut without paying for it in pretty much the harshest terms a tax wonk can muster, calling it a "magic unicorn" at one point. Feisty!

"A plan of business tax cuts that has no offsets, to use some very esoteric language, is not a thing," Callas said. "It's not a real thing. And people can come up with whatever plans they want. Not only can that not pass Congress, it cannot even begin to move through Congress day one. And there are political reasons for that. No. 1, members wouldn't vote for it. But there are also procedural, statutory procedural, legal reasons why that can't happen." [...]

 During his appearance, a very exasperated Callas explained that, in order to satisfy the Byrd rule, corporate tax cuts would probably have to sunset after just two years, making them utterly pointless. Here's how he put it:

    Here is a data point for folks. A corporate rate cut that is sunset after three years will increase the deficit in the second decade. We know this. Not 10 years. Three years. You could not do a straight-up, unoffset, three-year corporate rate cut in reconciliation. The rules prohibit it. You might be able to do two years. A two-year corporate rate cut--I'll defer to the economists on the panel--would have virtually no economic effect. It would not alter business decisions. It would not cause anyone to build a factory. It would not stop any inversions or acquisitions of U.S. companies by foreign companies. It would just be dropping cash out of helicopters onto corporate headquarters.
Tell us how you really feel, George.

...to take anything he says seriously.

Posted by at April 27, 2017 1:33 PM