Wednesday, October 25, 2017

Taxes, Gridlock and the Market

The stars are aligned for tax cuts to pass before the holidays. The converging forces are the 2018 midterm elections without a legislative accomplishment, the latest Gallup poll recording Congress at a recent low in approval (13%), Washington dysfunction rated the country’s top problem (health care is second), and several polls showing Democrats with double-digit leads in the generic ballot test.

Of course, the dissatisfaction is being framed by the spectacular failure of health care repeal and replace and specifically a revolt against the Republican establishment fanned by Steve Bannon, the Breitbart populist-nationalist.

The only metric that has been working for Republicans has been the stock market with its dramatic 26 percent rise from a year ago to 23000. Tax cuts are seen as critical to investor optimism and the market’s buoyancy.

It’s hard to imagine a better or more urgent moment for Republican action.

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