Politics, Moderate



Why are Republicans in such a rush to pass tax reform? To outrun the truth.

Catherine Rampell on

Consider the so-called "guardrails" intended to prevent workers from self-incorporating and taking advantage of the new preferential rate on pass-through income. Those remain extremely easy to game.

Meanwhile, some pass-through businesses will (oops) face marginal tax rates of 70 percent. Under normal circumstances, a tax rate this high would send Republican policymakers running for the hills.

There are other foreseeable problems, too.

The bill may violate World Trade Organization rules, for example. And the shift to a territorial taxation system would also likely encourage companies to shift more, not less, of their operations abroad.

The interaction of some other provisions would encourage taxpayers to make investments that they know would lose money, as New York University School of Law professor Daniel Shaviro has pointed out.

Those are just some of the problems that tax experts have identified so far. Surely more will come out in the weeks and months ahead, as clever accountants and tax attorneys identify new ways to take advantage of slapdash legislative language.

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If Republicans were smart, they'd give themselves sufficient time to properly vet and craft this legislation. Apparently, they'd prefer to keep their heads in the sand.


Catherine Rampell's email address is crampell@washpost.com. Follow her on Twitter, @crampell.

(c) 2017, Washington Post Writers Group


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