PRAGER: 4 Ways to Improve the Tax Bill
Dennis Prager is off. The following is a column by Stephen Moore.
The Senate-passed tax bill is a policy triumph that will provide a shot of performance-enhancing drugs to the veins of the economy. It’s not perfect, but with the combined effect of cutting business tax rates, eliminating the state and local tax deduction and repealing the Obamacare individual mandate tax, we are at the precipice of the biggest conservative policy victory since the Reagan years.
If Republicans were wise, the House would vote immediately to approve the Senate bill and get it to President Donald Trump’s desk for signing before anything can go wrong. (Think Obamacare repeal fiasco.)
But since they are insisting on a conference, there are still a number of ways to further improve the bill, grow the economy even faster and counteract some of the liberal complaints against it. Some of these reforms were in the original campaign tax plan that Larry Kudlow and I helped draft for then-candidate Donald Trump.
Here they are:
1) No stealth capital gains tax hike.
The Senate bill changes the rules for capital gains taxation. It requires shareholders to sell their oldest shares in a company before their newest purchased shares. The older the share, the larger the taxable capital gain.
This might make sense, except that the gains on long-term stocks are not adjusted for inflation. So on many sales of long-held stock, as much as half of the reported and taxable “gain” is due only to the compounding effect of inflation.
This new “FIFO” (first in, first out) rule will require millions of Americans to pay additional tax on phantom gains and will discourage the very long-term investment that the economy needs now.
Worse, under the Senate bill, there is an exception for mutual funds and other institutional funds. Companies such as Fidelity and Vanguard would be exempt from the tax, but not the little guy who wants to buy and sell stock on his own. Unfair. Kill it.
2) Repeal the corporate state and local deductions.
Big companies, such as Boeing and Microsoft, will get to continue to deduct their state and local taxes. Small businesses won’t. This is absurd and only shows the continued power of K Street swamp lobbyists. This deduction requires taxpayers in low tax states to subsidize companies in high tax states. Get rid of the corporate state and local deductions, and states such as New Jersey, Iowa and Pennsylvania will be forced to cut their corporate tax rates to stay competitive. It’s a win-win for everyone.
3) Cut the highest income tax rate.
The money raised by eliminating the state and local tax deduction for corporations should be used to pay for a reduction in the highest income tax rate. This would provide relief for people living in high tax states, such as New York, Connecticut and California (who lose the state and local deduction), and would allow small businesses to get a bigger tax cut as well. As Arthur Laffer and Steve Forbes remind us, the highest income tax rate is the one that does the most harm.
4) Close the George Soros loophole.
George Soros just recently gave $18 billion to his family foundation, and the money went in tax-free. This is possibly the biggest tax dodge in American history. Millionaires and billionaires who give money tax-free to private foundations should pay capital gains taxes on these assets, then give it to the foundation. This will raise hundreds of billions of dollars for the government over time and can then lead to a lower capital gains tax for everyone.
These are small tweaks to the tax bill that would make a big difference for growth and fairness. But above all else, Congress, stop dithering, and get going to deliver this pro-growth tax bill before Christmas.
Stephen Moore is a senior fellow in economics at the Heritage Foundation and an economic analyst for CNN. His latest book is “Fueling Freedom: Exposing the Mad War on Energy.” To find out more about Stephen Moore and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate webpage at www.creators.com.
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Last Updated: Monday, Dec 11, 2017 18:05:01 -0800
"As profound a thinker as our nation has at the dawn of the 21st century -- Jack Kemp
"One of the three most interesting minds in Jewish life." -- New York's Jewish Week
"One of the ten most powerful people in Los Angeles ... a moral compass." -- Buzz Magazine
Dennis Prager is one of America's most respected radio talk show hosts. He has been broadcasting on radio in Los Angeles since 1982. His popular show became nationally syndicated in 1999 and airs live, Monday through Friday, 9:00 a.m. to noon (Pacific Time).
In 1994-95, he also had his own daily national television show, and he is often seen on such television shows as Larry King Live, Politically Incorrect, The Late Late Show on CBS, Rivera Live, The Early Show on CBS, Fox Family Network, The O'Reilly Factor and Hannity & Colmes. Mr. Prager has been the main subject on CSPAN several times over the past years.
His most recent book, "Happiness Is A Serious Problem," was published in February 1998 by HarperCollins. This long-awaited book, about which Mr. Prager has lectured worldwide for 10 years, appeared on the Los Angeles Times bestseller list the week of publication and appeared 15 consecutive weeks, rising to No. 1.
His 1996 book, "Think A Second Time," 44 essays on 44 subjects (HarperCollins), was described by Bill Bennett as "one of those rare books that can change an intelligent mind." USA Today columnist and professor of law Susan Estrich called it "Brilliant, a tour de force."
He has also coauthored two major works about Judaism: "The Nine Questions People Ask About Judaism," now in six languages, and "Why The Jews? The Reason For Antisemitism," regarded by many as the most persuasive explanation of anti-Semitism written.
Mr. Prager has engaged in interfaith dialogue with Catholics at the Vatican, Muslims in the Persian Gulf, Hindus in India, and Protestants at Christian seminaries throughout America. For 10 years, he conducted a weekly interfaith dialogue on radio, with representatives of virtually every religion in the world.
New York's Jewish Week described Dennis Prager as "one of the three most interesting minds in American Jewish Life." Since 1992, he has been teaching the Bible verse-by-verse at the University of Judaism. All the lectures are available on audio and video tape.
From 1985 to 1995, Dennis Prager wrote and published the quarterly journal Ultimate Issue. From 1995 to 2000, he wrote The Prager Perspective. Harold Kushner, author of "When Bad Things Happen to Good People," said, "It is the only journal I read cover to cover the moment it arrives."
His writings have also appeared in major national and international publications including, Commentary, The Weekly Standard, The Wall Street Journal and the Los Angeles Times. His newsletter essay on homosexuality and civilization was awarded the $10,000 Amy Foundation First Prize.
Mr. Prager was a Fellow at Columbia University's School of International Affairs, where he did graduate work at the Middle East and Russian Institutes. He has taught Russian and Jewish history at Brooklyn College, and was appointed by President Ronald Reagan to the U.S. Delegation to the Vienna Review Conference on the Helsinki Accords.
He holds an honorary doctorate of laws from Pepperdine University and has lectured on seven continents, in 45 U.S. states and in nine of Canada's 10 provinces. He has lectured in Russian in Russia, and in Hebrew in Israel.
He has made and starred in "For Goodness Sake," a video directed by David Zucker ("Naked Gun"), shown on Public Television and purchased by hundreds of major companies. His two latest films are on character and race.
Mr. Prager periodically conducts orchestras, and has introduced hundreds of thousands of people to classical music.
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Originally posted at http://get.creators.com/content/release/218275.