For the large contingent of Washington supply-siders and tax-cutters, the sweeping tax overhaul that President Donald Trump is poised to sign into law this week has been a generation in coming — and the culmination of half a life’s work that started during Ronald Reagan’s 1980s.

Grover Norquist, arguably the best-known anti-tax activist in the country, started Americans for Tax Reform at then-President Reagan’s request to help marshal support for the 1986 tax overhaul. He's been working ever since to rally support for more tax cuts.


House Speaker Paul Ryan (R-Wis.) for years said his dream job was to be House Ways and Means chairman, a position that would have allowed him to quarterback the sort of tax revamp that his mentor, the late Jack Kemp, helped get through Congress in 1986.

When he became Speaker, Ryan said he was reluctantly passing the title of Ways and Means chairman, and the opportunity to focus attention on tax reform, to Rep. Kevin Brady (R-Texas).

Now, the 2017 tax revamp will bring the American tax system more into lockstep with those conservatives’ thinking than perhaps ever before — making the idea that what works for corporate America will work for the country at large a central plank of U.S. policy for decades to come, maybe even a generation or more.

“This tax cut and reform will drive further reforms and reductions for the next 50 years,” Norquist said Friday.

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The corporate rate would be slashed from 35 percent to 21 percent under the GOP plan, which would also allow businesses to immediately write off investments for five years and scrap Obamacare’s individual mandate. In an extra bonus for the right, it also shrinks the deduction for state and local taxes, an incentive that mostly helps blue, high-tax states.

“This is a pretty historical moment for the conservative movement,” said Stephen Moore, another of those supply-siders, who has over the years worked at the Club for Growth, The Heritage Foundation and The Wall Street Journal editorial page.

“I’ve been in this game for 30-some years. This, if it passes, will be the single biggest policy triumph for conservatives since the 1996 welfare reform. It’s up there with the ’81 Reagan tax cuts,” added Moore, who’s an informal adviser to the president and, along with fellow supply-sider Larry Kudlow, helped then-candidate Trump craft his tax plan.

The start of the conservative tax-cutting movement is frequently traced back to 1974, when a young economics professor named Arthur Laffer met an equally young Dick Cheney, then a top aide to President Gerald Ford, at a restaurant. Laffer doodled on a napkin the case that cutting taxes can increase revenues for the government, a theory now known as the Laffer Curve.

That case is maybe most famously argued by Kudlow, who worked in Reagan’s White House and has spent more than 15 years defending its merits on CNBC. Perhaps even more importantly, Moore said, Kudlow worked overtime to pitch the GOP tax plan to skeptical Republicans like Sens. Susan Collins of Maine) and Bob Corker of Tennessee, both of whom now seem likely to back the measure.

It might be hard to imagine now, but the Republican Party hasn’t always been dominated by would-be tax cutters. Former Senate Majority Leader Bob Dole (R-Kan.) once joked that “the good news is that a bus full of supply-siders went off a cliff. The bad news is that two seats were empty,” according to “Showdown at Gucci Gulch,” the book about the 1986 tax overhaul.

But the supply-side theory eventually won out, if in fits and starts. Reagan’s 1981 tax package cut the top individual rate from 70 percent to 50 percent — with the rate getting down all the way to 28 percent in 1986.

Republicans now credit those 1981 tax cuts with sparking years of economic growth, higher wages and job creation. But with the economy floundering in 1982, Dole and other Republicans pushed through a tax increase. And Democrats have long said that there was no trickle in the GOP’s “trickle-down economics,” pointing to a 1990s economic boom that happened after President Bill Clinton raised taxes.

Conservatives believe the growth had more to do with a cut in the capital gains rate under Clinton’s watch, which itself was followed several years later by the two rounds of tax cuts under George W. Bush.

Now, 15 years later, all that work by supply-siders has culminated in a new kind of tax reform, which marries the theory that tax cuts for business will be a boon for the economy with tax reform’s customary discarding of various tax incentives that have collected over the years and that they say distort the economy.

Marty Sullivan of Tax Analysts said the 2017 tax overhaul looks more like the 1981 and 2001 tax cuts enacted under Republican presidents, as opposed to tax overhauls in 1969, 1976 and 1986. The 1986 tax reform, while lowering the top corporate rate from 46 percent to 34 percent, actually hiked taxes on corporations to pay for tax relief for individuals, and to keep from adding to deficits.

“Those were all workman-like reforms where the staff and members looked hard for unfair and complicated tax breaks to take out of the code to simplify it, make it fair and reduce rates,” said Sullivan, a former economist for both the Treasury Department and the Joint Committee on Taxation. “In this bill, tax cutting is the primary motivation and reform is an afterthought.”

The next question is whether this bill will jolt the economy the way its supporters predict. Trump and other top Republicans have said that the economic growth created by the tax cuts will more than offset its current $1.456 trillion price tag.

But while outside analysts and JCT have found that the Republican tax plan would create hundreds of billions of dollars in new revenue, none of them have found that the plan would come close to paying for itself. On top of that, Democrats are already making it clear that they’ll do everything in their power to unwind this year’s tax bill, especially if they win back some power in Washington next year.

“One of the lessons of ‘86 is it’s really hard to get tax reform, but it’s even harder to keep it,” said Douglas Holtz-Eakin, a former Congressional Budget Office director and president of the conservative American Action Forum. “I think it’s a concern. The partisan nature makes it ripe for change the moment the Democrats get the opportunity.”

For their part, conservatives say they’re in better shape than ever to protect the new tax cuts. Republicans were united against former President Barack Obama’s efforts to allow Bush-era rates for the wealthy expire, though they weren’t successful in the end, and Norquist notes that bipartisan efforts that erased parts of the 1986 tax overhaul came before practically all GOP lawmakers were signing his organization’s pledge against tax hikes.

But Moore also called the 2017 tax cuts a “riverboat gamble,” echoing the late Senate Majority Leader Howard Baker’s thoughts on the 1981 Reagan tax cuts. Their success or failure, Moore added, will have a big impact on whether the supply-siders’ influence grows or diminishes over the next generation.

“We say it will work, and they say it won’t and this will be put to the test,” Moore said. “If this doesn’t work, I’ll eat some crow.”