With the completion, signed into law “Tax Cuts and Jobs Act” officially entered into the books, removing the question of whether or not the republican congress could/would pass any of their original campaign promised legislation before year-end. (i.e., Obamacare reform, regulation reform, tax reform.) The next question, possibly with as much impending importance as that first, is two-fold.
First: “What does it all truly mean?” And second: “Where do we go from here?”
Let me be right up front and make my opinion known when it comes to this current legislation: I am not a big-fan primarily for these points:
One: I’m sick-to-death of any legislation that requires “re-authorization” or some other mechanism as to avoid taxpayers from incurring a sudden massive increase if they don’t vote a certain way or for a certain party in the future. i.e. Tax rules that expire (think: AMT as just one) which just so happen to fall during major election cycles. That’s not tax cutting under the umbrella of reform, or what was once known as such – that’s just can-kicking and re-holstering a loaded weapon. Knock that crap out of politics and now you’re talking true reform, or at least a start of it.
Two: This whole “pay for” argument. It’s bogus, disingenuous, as well as insidious. Paying for this tax bill, as argued, means the government does not go without one cent less. That’s not true tax cutting – that’s only tax shifting. Although I agree with many of the provisions of that so-called “shift.” What it does not do is reduce the overall burden of taxation for the entire populous.
To “pay” for this tax bill, what I believe would have been far more effective: is a 1% reduction across the board from the previous budget going forward for the next 7 years. This concurrent with an inability as to increase for any static growth imbedded as is done every year (i.e., inflation styled adjustments which can be endlessly gamed) would be true reformation, as well as truly “bigly.”
With that said, I’ll take it as a first start. Yet, not for what is actually contained within, but rather, for what it possibly signals in a psychological sense. For as flawed as I perceive this bill to be, what I believe to have also perceived is an underlying shift in the tenor, tone, and quite possible attitudinal resolve to actually work together on future legislative endeavors. i.e., There’s a chance, as ever so slight as it may be (for we are talking politicians here) that a return to the prior debacles of healthcare and regulatory reforms, with an intent of actually pushing through meaningful reform/legislation, might actually be plausible over the next few years. (I’ll pause here for a moment so we can both stop laughing. OK, let’s continue…)
There were two seminal moments in the final stages that truly caught my eye. The first was the combination of events involving Sen. Bob. Corker, then senator Mitch McConnell and House Speaker Ryan at the celebration rally. These alone were quite informative to those trying to pay attention, for there was a clear shift in direct proportion to the president.
Sen. Corker had made no bones about his opposition to not only the President, but nearly any and all of his ideas on legislation, as well as the process since the election. Then – this latest CNN™ interview happened. And all that seemed to change with it.
The now outgoing (important point) senator publicly revealed (another important point) he had spoken with the president and issued a subtle form of mea culpa stating he now understood what the president was going through in regards to the media. To wit:
During the call, Corker said he told Trump, “‘I have some empathy, if you will, with what you’re dealing with,'” concerning the media.
Then there was this…
Corker, who decided not to seek re-election next year, said he was surprised and troubled that a “social media phenomenon can turn real live people that you respect in reporting to start writing things that have been totally debunked, but writing things as if the opposite is true.”
The issue that’s revealing, from my perspective, is the senator did not need to publicly state anything. Usually, something like this is all well and dandy behind closed doors, or with a nod of tacit acknowledgment should it ever be revealed or known in public. But to publicly state it on one’s own, for no other reason then just making one’s opinion known? In political terms: that’s an epiphany type moment that affects not just one – but quite possibly – an entire party. Which brings me to the celebration rally with the two majority leaders McConnell and Ryan.
In what seemed was going to be just another form of “We did it!” big celebratory hoopla, when in actuality the raising of a beer-glass at the local pub would have more than sufficed as to represent what was passed. This one was quite revealing, in a way I believe needs to be pointed out for those whom may have not seen, or noticed.
Both Sen. McConnell and House Speaker Ryan seemed to actually be heaping genuine, as well as meaningful praise on the president for the passage of this bill. Yes, politicians of all stripes know how and when as to make sure there’s inclusion for all within the party. However, if you actually listen to their wording, along with delivery and postures? It’s hard not to see that something has changed. And that change could be profound in its meaning for actually governing and putting forth meaningful legislation going forward.
For suddenly – there seems to be cohesion.
Personally, I think the “Corker moment” was an epiphany understood by many. And if there’s even the remotest chance that there might be a willingness (because they’re no longer scared of their own shadows in the media, because they know it no longer matters) to put forth meaningful reforms and a president that will sign them? I’ll take it. Whether it’s true or not remains to be seen. Nonetheless, again, I’ll take it.
Here’s something else I’ll take when it comes to this legislation: The pass through provisions regarding businesses.
There are a lot of people far smarter and informed on what the mechanics of this legislation will actually do in the forms of what one will owe, or not owe in taxes than I do. But here again is where I feel the numbers for whom it can affect may be more important than the actual formulation of numbers contained within.
There’s a lot of hand-wringing about high wage earners possibly leaving the employ of some company as to take advantage of these new provisions and become self-employed and hire themselves back to their once current employers. My take?
Fantastic! Do it! Anyone and everyone that has the means and wherewithal to become an independent business owner should do it. I believe this regardless of the tax law. But if this current legislation is only a small move in the fulcrum that persuades one to do it, then as Nike™ famously said: “Just Do It!”
This nation was built by small, independent businesses. From the sole-practitioner (think from your local Dr. to your local plumber as a sample) to the small business that used to fill every downtown center or local industrial park. These were (and in some places still are) the businesses that used to employ the majority of jobs that were local, well-paying, and had a sense of purpose and connection to their surrounding communities. And they have gotten the shaft year, after year, after year for decades. If this helps them in the slightest? I’m all for it, and will look at it as a good first start. Again – first start.
In my opinion: The more it puts or enables people to move into the “independent contractor” side of the ledger – the better. Why? Easy: The more people who truly understand business (i.e., why there’s a need to make a net profit) along with the dealing with first hand the onerous taxes, regulations and more that are thrust upon it with every election cycle, by actually having to pay and follow those terms via being a business owner, rather than just an employee who doesn’t fully understand, comprehend, or worse even pay attention to any part of their deductions (think, FICA as one) on their pay stubs – the better we all are.
We are facing a multitude of issues still staring us down in a way as if looking down the barrel of a fully loaded Howitzer. And the stakes, one could reasonably argue, (of which I am in that camp) have never been greater.
There is the possibility, again, as slight as it may be, that the aforementioned “tax bill” may prove to be more important in its substantive attitudinal adjusting, rather than its proclaimed tax substance. Or said differently using a sports analogy…
You could feel the momentum change – and with it – so the game.
It’s quite possible we may have just seen it as a nation. But then again, we are only in the first quarter. And if the mixing of football and politics has shown us anything over the last year. Maybe the players (e.g., the pols) should celebrate these little victories quietly, while continuing to push ever-the-more until the final tick has run off, before any larger celebratory actions take place.
Continuing with the football analogy – there are still 3 more “quarters” to go, as in political election years. And after all, for any clues as to what could go wrong?
© 2017 Mark St.Cyr