Cohn is Getting It All Wrong on Taxes

Given recent controversies, I was interested to read National Economic Council Director Gary Cohn’s answer to a “why are you staying?” question put by Stuart Varney of the Fox Business Network last week. To his credit Cohn did not back away from his reservations about the president’s response to the Charlottesville violence. He said “Look, tax cuts are really important to me. I think it’s a once-in-a-lifetime opportunity. We haven’t done tax cuts in 31 years. So, to be a part of an administration that gets something done that hasn’t been done for 31 years is enormously challenging, enormously interesting to me.”

The problem with this statement is how utterly wrong it is. Taxes were not cut 31 years ago. A central point of the 1986 Tax Reform Act was that it was revenue neutral. And since that time, taxes were cut in 1997, 2001, 2003, 2009 and 2015.

Now perhaps Cohn misspoke in invoking tax cuts three times and meant to convey with his references to 31 years ago that in his view there was a chance for another major tax reform achievement like the 1986 Tax Reform Act. Fair enough. The trouble is that as best as one can glean from what is out there, the tax legislation the administration is working toward is more opposed to, than in line with, the spirit of the 1986 act.