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If there’s one thing that Republicans can agree on, it’s tax cuts. On lower taxes, there are no regional disagreements, no ideological dissenters, no schismatics jockeying for control of the party. On taxes, Republicans all sing from the same hymnbook written by the sainted Reagan, in broad harmony.

Megan McArdle

Megan McArdle

Why, then, do their stumbling efforts on taxes look so eerily like the shambolic process of repealing and replacing Obamacare? Why does it seem so possible that the whole thing is going to end the same way: with Republicans slinking away in defeat from one of their core campaign promises?

On Tuesday, House Republicans announced that their tax bill, which had been expected Wednesday, would be delayed until later in the week. It did arrive on Thursday ... with the caveat that it may be rewritten over the weekend.

These sorts of last-minute announcements are not exactly unheard of during the messy legislative process. But the list of things Republicans dithered over seems remarkably long. As of Wednesday, they still hadn’t agreed on what to do about the state and local tax deduction, what to do about 401(k) accounts, or how to keep wealthy individuals from abusing the new special low rate for pass-through entities. Which is to say, they are agreed on the tax cuts; what they can’t seem to do is agree on how to pay for them.

Why such difficulty? One story we can tell is structural: It’s harder to do tax cuts now than it was in 2001, or the 1980s. Reagan got his tax cut through by dint of the famous “magic asterisk” _ savings to be named later. Bush was lucky enough to push his tax cuts at a time when we still had a budget surplus. Thus, both of them got to focus on the fun stuff _ giving taxpayers back their money _ while avoiding the hard questions: Who, exactly, are you going to spend less on to make up for the lost revenue?

Today’s Republicans do not have such luxury. The budget is not in surplus, in part because of the aforementioned Bush tax cuts, but mostly for other, structural reasons. And we all saw how the magic asterisk played out in the early ‘80s, so they’ll find it hard to get away with that one again.

Meanwhile, bipartisanship has collapsed, so they have neither hope nor interest in making a deal with the Democrats, who are likely to filibuster any attempt to cut taxes. To avoid the filibuster, they’ll have to push their tax bill through a budget process called reconciliation, which further restricts their options — for example, the bill cannot increase the deficit beyond the 10-year forecast window.

That structural account has some truth to it: Today’s Republican tax-cutters really do have it harder than their forebears did. But that doesn’t explain why this process seems so ... haphazard. They are not quibbling about minor details, or even one big stumbling block; one day before the bill was supposed to be out, a number of its biggest and most controversial provisions were still simultaneously under negotiation.

But we can also tell a different story about these facts: a story about how much presidential leadership matters.

When Trump was elected, I found myself asking old Washington hands a question: How well could the government run itself without Trump’s participation? He had shown little interest in the policy parts of the presidency during the campaign, and it seemed unlikely that he was suddenly going to develop a governing philosophy and a late-life interest in the contents of wonky briefing books. Could he just end up as a figurehead, attending signing ceremonies and ribbon-cuttings, while the real business of government went on without him?

The response was derisive laughter. American government, they said, didn’t and couldn’t work that way. I reserved judgment until I saw how things developed, and having seen it, I concede that they were correct. The absence of leadership from the president himself — shaping priorities, guiding the process, using his political capital to secure a deal and sell it to the American public — has left a power vacuum at the heart of the legislative process. And that vacuum threatens to suck even the most agreeable, obvious, and dearly held Republican ambitions into the void.

Even when the president wants to do a tax plan — as he clearly does — he is insufficiently focused on the process to assist in making it happen. His assistance appears to consist of occasionally tweeting about things he would not like to find in the bill, things that would probably be better communicated in private. Meaning he will have a hard time coming out in favor of some provision that he was days earlier excoriating. This will complicate the one job he must do, if Republicans want to get tax cuts through: convincing the public that it’s a good idea.

Republicans are struggling on taxes for the same reasons they’re struggling on everything else: They are less of a party than an uneasy alliance of warring factions with little in the way of a common cause. Unless they find some leadership to hold them together, they are likely to end up where such alliances usually do: broken on the wheel of history.

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of “The Up Side of Down: Why Failing Well Is the Key to Success.”


(16) comments


Homey, your personal attacks are drowning out your message. As I have said numerous times, there is no need to tout my success and yet you continue to do so. It is no small feat to remain with a fortune 300 company for near 40 years, that I can assure you. You and the rest of the clowns expressing personal insults do not further your agenda, it actually makes you look small and trivial. You know I'm right on the issues and it is killing you to the point of personal attack. My guess is you were not as successful and resent those who were. I guess you see it as a correct reaction to your shortfalls. I understand and bring it on.


Well, new2, as a matter of fact I put in 45 years with a Fortune 300 company. I did pretty well there, practicing the craft that had always been my ambition, never wanting to rise into the executive ranks. That might, in your eyes, mean a lack of success, but I was well paid throughout my career, though not extravagantly so, and I always liked what I was doing -- a job I was well-suited for. I worked a few years beyond retirement age because I still enjoyed it, leaving on my own terms.

You apparently were laid off before you were Medicare eligible, and despite 39 years at the company (you claim), your employer left you without a bridge plan for healthcare to tide you over until you were old enough to enroll in Medicare. If you want to dispute me on this, I will gladly reprint your own words that you wrote in these comment strings that back me up.

You have left yourself wide open to ridicule as you expound right-wing Chamber of Commerce dogma, assuring us what a force you were in your corporate years.

You certainly call into question the truthfulness of your claims simply from your utter ineptness so evident in your comments you send to these strings. You seem completely unable to compose a basic, logical, understandable, coherent argument in defense of your opinions. Such a skill would seem to be mandatory if you were to work, for example, as an executive of an HR department in a Fortune 300 company. You plug in right-wing talking points and lies, often when they contradict your own positions.

And how many times do I have to reprint your bald-faced lies about your experience with Obamacare? YOU set yourself up for the ridicule. If you have a message, be honest and knowledgeable about it, otherwise expect to continue to be a laughing stock on these posts.

If you are insulted by people on these posts denigrating your silly fulminations, so be it.


It appears that new2, the wily old HR man for a Fortune 300 company, has nothing to say in his own defense. I guess that means, then, that you can accept my portrayal of in my 7:51pm post as being close enough to the truth that you could take it to the bank.


Exlax new2 is truly delusional, or just "high"., perhaps,
since Obamacare starts up today, in FULL force,the plan everyone likes,
contrary to the Orangetange in Chief, who claimed 2 weeks ago :"The disasterous Obamacare is history".
That dude lies man !!!
Ya"ll didn"t know that?
Way,way,way, too funny.


You must be the one who got the Obama reduction. No one paying for it, likes it. Only another 35% increase this year, I see they managed to keep it under a 50% increase this year. I guess keeping the increase to this level is considered a real success.


well new2, no one is forced to sign up for Obamacare, its a choice. And yes there are plenty of people who like it, millions as a matter of fact. How about that Medicare I assume you are enrolled in? Another government program designed to help with healthcare costs and is voluntary. How is that socialists program working for ya?


Anyone who thinks the middle class is going to see a tax cut, they are as delusional as Trump is a liar. The repubs are so beholden to their wealthy bribers the cuts you are going to see are your deductions taken away, which in fact is a tax RAISE. Just like Reagan, when he eliminated the deduction of credit card interest, and other deductions you could have taken. Same thing is happening here. This is going to be another Ponzi scheme and you , the taxpayer are the losers.


You should know about delusional as a result of Obama care. Now that's delusional at its best, promise 2500 dollar savings and end up costing you 5500 dollars instead. Maybe this won't happen with the reduction in rates, at least that's what the watch dog groups say. The average middle class family will end up 4000 per year better off. Why not try it and see, if it is incorrect, change it. The reason this will not be acceptable to the left is clearly, it may be correct and work. Rather than take that chance, you must not support this plan. Just look at the errors made by the left in their predictions so far, Paul Krugman, GDP will not exceed 1%, already it has reached 3%, Mark Cuban, Trump elected President and the market loses thousands of points, instead 62 records achieved and tax plan not even passed yet. The lowest unemployment rate in 17 years, improving job participation, folks now off the food stamp rolls, 1 million more home owners. Five off year elections won by Republicans. Still with all this, thousands of officials left to appoint to this Administration.
Now that the government is opening investigations into the Hillary and Obama Administration scandals will be a distraction for this Administration, it is a must. With the help of this FBI informant on Uranium One, Hillary's Russian Dossier involvement with the Russia investigation of Trump. My guess is Sessions will be fired or will resign, clearing the way for the new AG to take over the Mueller Russia fiasco because of his conflicts of interest. The reason this will be appropriate is because he is now investigating things he and Rosenstein were involved with regards to Uranium One and the Dossier.


new2lax, your ramblings on various topics at one time is incoherent. You keep blasting obamacare. ok its not perfect, and needs some fixing. Instead of continually whining about it, put your big boy pants on and tell us what you would do to fix the health care system in this country. Anyone can whine and complain, how about some real ideas and solutions. The repubs can certainly use your help in this area, for they are dysfunctional when comes to coming up with an alternative that would provide affordable comprehensive coverage for all Americans. So how would you do it?


Thank you, kingman, for once again illuminating the new2 fulminations, which are hopelessly muddled and inscrutable. It is remarkable, after new2 personally lied so many times about his personal experience with Obamacare that he would have the chutzpah to come back here and constantly comment on it. He is bitter about Obamacare when he should be bitter about his Fortune 300 company that employed him for nearly 40 years, only to lay him off with no bridge to keep him insured until he could get on Medicare. On the other hand, if new2 isn't lying about his position as a crack HR man for a Fortune 300 company, the quality of new2's posts and thinking exposed on these comment threads would certainly seem to warrant that he should have been fired for incompetence not too long after he was hired. Perhaps his cousin ran the company.


The only reason the Repubs have not fixed Obamacare, is because it was created by an intelligent, educated black person, which is also the reason that bigot Mitch McConnell kept insisting o making Obama a one term president.. Didn't happen did it? Now that they are in control of everything, they can't seem to control anything or fix anything. Tax reform is a joke on the middle class and a windfall for the ultra wealthy.



Tim Russell

Nice screed comrade.


You are an idiot. If it doens't work change it???? Who is going to change it and when? Once it's law, that's it.

Tim Russell

The Republicans could actually pass Tax Reform. Unfortunately that is not what they are proposing.


republicans just don't know how to govern. Their past fiascoes on health care and immigration have proven that. When they decide to operate out in the open, not behind close doors, and do so with bipartisanship, then they could get something meaningful past. Something that promotes the common good, not just their special interest of the super rich. Don't see that happening anytime soon.

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