The tax changes passed under the current administration have been an enormous missed opportunity. They also demonstrate that, despite its rhetoric, the Republican Party is not interested in fiscal responsibility or cutting the size of the government.
The changes make progress in many areas. Reducing the deductibility of state and local taxes is an important step in the direction of federalism and competition between the states. Reducing the deductibility of mortgage interest cuts back on this misguided subsidy. Raising the standard deduction has removed a large number of Americans from the oppressive Federal income tax system. Reducing corporate income taxes is an improvement that will encourage greater investment, growth and wages in the future. The move to a territorial tax system for corporations brings America into line with the rest of the world.
In general, however, the changes were cuts with far too little reform. The US tax code remains overly complicated, enormously inefficient and rife with special-interest favors. In fact, areas of the code have actually been made worse by the changes, particularly because of the haphazard and rushed way in which they were made. The changes fall far short of the goals of reducing rates, widening the tax base and treating all income the same.
But by far the biggest problem with the tax changes is that, while they reduce rates, nothing is being done to rein in the expenditure side.
Tax cuts without expenditure cuts are merely tax deferrals!
We are simply passing the problem to the future and to our children. Eventually taxes will have to be raised to pay off the debts we are incurring. Only by cutting expenditures, in line with proposals contained here [link to expenditure discussion], can we pass true tax cuts. The Libertarian Party is the only party committed to cutting the size and cost of the government. Other politicians are simply engaging in short-term campaign bribery.