The Tax Cuts and Jobs Act will spark a renaissance of fiscal conservatism — leading to further tax cuts — so long as politicians don’t lose their nerve, panelists said at a gathering of conservative activists.
“I think the passage of the federal [tax] bill is just the beginning,” Mattie Duppler of the National Taxpayers Union said February 23 at the Conservative Political Action Conference annual meeting in Maryland. Public opinion of the Tax Cuts and Jobs Act (P.L. 115-97) will continue to improve as paychecks go up and companies invest more in the United States, which will generate more interest and “strengthen the spines of people who want to continue to cut taxes . . . at a federal, state, and local level,” she said.
Republicans need to take advantage of the tax law’s rising popularity and continue to talk about its benefits if they want to achieve “pro-growth policy in the future,” Duppler added.
Fellow panelist Tim Huelskamp, a former congressman and now president of the Heartland Institute, suggested that Republicans need to be prepared for resistance to their plans and strategize accordingly. Huelskamp said state and local governments may try to raise taxes in the wake of the federal tax cut, which he asserts happened after President Ronald Reagan passed tax cuts.
“We need to focus on the state level and push back on any of the politicians of either party . . . say ‘no new taxes’ because of what’s happening in Washington, D.C.,” Huelskamp said. “We have to be vigilant,” he added.
Huelskamp said Congress is unlikely to pass any new major tax legislation before the 2018 midterms, but noted that the Trump administration still has room to simplify the tax code, particularly if the president’s nominee for IRS commissioner — Charles Rettig — is at the helm.
The panelists also unanimously rejected the idea of raising the gas tax to generate revenue, something President Trump has expressed some interest in.
“If you did this gas tax [increase] . . . it would take away 50 to 60 percent of the tax cuts,” Huelskamp said, adding it would also be “really, really stupid politically.”
Duppler similarly argued that because the gas tax is an excise tax, any rate increase would be inherently regressive. She also said that “until we don’t have pilfering of the Highway Trust Fund” and gas tax revenues are used exclusively for highways, increasing the gas tax should be off the table.
Another panelist, former Libertarian Party presidential nominee Gary Johnson, said that while a gas tax is the “best example of a libertarian tax” because it’s modeled as a user fee, owners of gas-powered vehicles will increasingly be subsidizing electric vehicles as they become more commonplace.
Instead, Johnson said to expect legislation introducing a miles-traveled tax for vehicles — an idea the White House appears to be considering — by the end of the year.
Huelskamp then chimed in to say that vehicle tracking technology already exists in many new vehicles, so it’s only a matter of “whether or not we let the government use them.”
“We do not want that to happen,” Huelskamp added.
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