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Closing this escape hatch was deemed infeasible by the small group of economists and specialists, including this writer, convened to wade through reams of economic data and recommend changes. But if the border adjustment tax is indeed off the table, and if Alan Cole of the Tax Foundation is right that eliminating interest deductibility would produce $1 trillion in revenue over ten years — the same as would a border adjustment tax — Trump might change his mind on this as he has on other matters. That would generate enough cash to allow cuts that would bring the statutory corporate tax rate to a level well below the current 35 per cent, although still above the Ryan and Trump targets, without increasing the deficit.

Which leads to one more proposal. A temporary tax holiday, setting the rate on repatriated earnings to, say, 10 per cent, would bring in considerable cash, and permit at least a temporary reduction in corporate taxes. Add some accounting fudge, and the corporate rate might be lowered another point or two.

That, however, would leave the President between a rock and his hard-faced constituents. He has promised a reduction in personal tax rates for almost all taxpayers, including a cut from to 33 per cent from 39.6 per cent for high earners, who would also be relieved of the 3.8 per cent surtax on interest and dividend income embedded in Obamacare. What Trump giveth Steve Mnuchin, his Treasury Secretary, plans to take away. He has announced that he will reduce high earners’ ability to benefit from various deductions, leaving them paying just as much in tax as they now pay. Trump has also promised to reduce tax rates borne by middle- and lower-income families, but Ryan & Co want to reserve tax-cutting ability for the corporate sector, which they say will flow through to all families via lower prices. Besides, as Larry Lindsey, former Fed governor and chief economist for George W. Bush, points out, increasing middle-class incomes, and hence their effective demand for stuff just when the economy seems to be hitting the ceiling of its ability to increase output, might trigger inflation rather than an increase in the growth rate.

In short, the administration has not got its act together when it comes to tax overhaul. Trump is eager for a victory, although under less pressure to produce one than before his generally approved decision to act in Syria rather than draw erasable red lines, and his presidential-quality performance when playing host to Xi Jinping. He just might accept some modest cut in corporate income rates, and a reduction sufficient to lure home some of the $2.6 trillion in profits stashed overseas, and declare victory. It would be an opportunity missed to overhaul — “reform” is the less accurate but more commonly used word — in the grand tradition of other efforts over the past three decades to engineer a durable structural overhaul of our tax code that just might Make America Great Again.

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