Should Tax Hikes Need Supermajority Vote? Bloink & Byrnes Go Thumb to Thumb

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Bloink: Professor Byrnes' argument doesn't actually seem to be a problem with the idea of protecting lower income taxpayers at all, and is more of a technicality that can be addressed in the bill's final form.

Byrnes: But how?  It just seems to me that this bill would make it virtually impossible to change most of the tax code without excessive support for any given change.  Consider the lower long-term capital gains tax rates.  The 20 percent rate that applies to certain carried interest and strongly benefits extremely wealthy hedge funds and other private investment funds also benefits…well, any American taxpayer with an investment that would be subject to long-term capital gains tax rates when sold.  Raising the corporate tax rates?  Well, that could impact the lower and middle classes because the corporations would pass those tax hikes along in the form of reduced wages and higher priced goods.

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Bloink: Don't get me wrong, I do think the bill needs work—we need to figure out how to define upper-income taxpayers in a way that makes sure those taxpayers who have used loopholes to lower their "on paper" taxable income aren't included in this protected class simply because they were able to take advantage of tax loopholes.

Byrnes: And that brings up another point, I think that the "top 20 percent" of American taxpayers earn a lot less than most people might think—some research shows that a couple making a combined $110,000 could fall within this range, and that's far from wealthy.  I'm sure the line could be drawn in a better way, but it still seems like an overly complex way to deal with tax reform debate.

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Bloink: The bill is a step in the right direction toward protecting those lower and middle income taxpayers who are suffering or merely breaking even under the new tax law because of the elimination of, or limitations placed on, valuable deductions and exemptions that helped the middle class—look at the suspension of the dependency exemption, which hurt taxpayers with multiple dependents or the limitation on deducting state and local taxes, which can be a huge burden for lower income taxpayers struggling to continue to live and work in high tax states.  Yes, these tax changes also hurt higher income taxpayers, but those taxpayers also see a more significant tax rate reduction under the new law.

Byrnes: I just think that if a majority of voters want a certain result, and elect their representatives based on their views, that majority should have the ability to pass a provision even if it does hurt lower income taxpayers.  We have plenty of provisions built into the tax code that offer protection for lower- and middle-class Americans—we don't need to eliminate the basic premise of majority rule in the tax law as a protective strategy.

— More Bloink & Byrnes Go Thumb to Thumb:

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• Should 2017 Tax Changes Be Permanent?
• Is the Proposed Child Tax Credit Even Needed?
• Is Inflation Indexing of Capital Gains Good?
• Are New USA Plans a Boon to Savers?
• Was It Right to Kill the DOL Fiduciary Rule?
• Is DOL Rule on Health Plans Bad?
• Trump's RMD Rule Change