RUTHFULLY YOURS

President Trump is filling out his Administration, but too slowly, and an offshore drilling proposal shows why having personnel to mind the store is so important. Barring a late reversal, Mr. Trump may abet his predecessor’s goal of undermining American energy production.

Two days before President Obama left office—the encyclopedia definition of a midnight regulation—U.S. Customs and Border Protection (CPB) rolled out a new rule on the Jones Act. Under this 1920 law, all ships transporting goods between U.S. ports must be U.S.-flagged, constructed in the U.S., owned by U.S. citizens and crewed by U.S. citizens.

Most ships in the offshore oil and gas industry like crewboats or platform-supply vessels already comply with the Jones Act in the Gulf of Mexico, Alaska and elsewhere. But Customs now wants to extend the mandate to certain specialized drilling, construction and engineering vessels. Currently, about 30 CPB regulatory precedents stretching back 40 years exempt these ships from the Jones Act.

The reason is that the drilling industry is global and mobile. Heavy-lift construction vessels, for example, are used to install moorings in deep water and perform other specific, limited tasks. There are 76 in the world—and none of them comply with the Jones Act. The international fleet of crane barges tops out at 173, only 17 of which qualify.

If the CPB reverses historic precedent, the damage will be immediate and disorderly. Current development will be delayed or the rule could even become a de facto moratorium. Removing foreign-flagged vessels from the U.S. supply chain will make future projects riskier and more expensive. Proponents claim U.S. fleets can simply buy new equipment, but that takes time and in any case is a misallocation of resources to satisfy an arbitrary regulation.

The motives of Mr. Obama and career CPB staff are obvious: to reduce oil-and-gas investment. Less obvious is the support of some Republicans in Congress, especially the Louisiana delegation led by Majority Whip Steve Scalise. They’re cheering because they think blocking foreign competition will benefit the local maritime trade.

As the national taxpayer advocate, I oversee an independent unit within the Internal Revenue Service that has helped more than four million individual and business taxpayers resolve their IRS account problems, and I am required to report to Congress annually on the most serious problems encountered by U.S. taxpayers.

If I had to distill everything I’ve learned into one sentence, it would be this: The root of all evil is the complexity of the tax code.

There is currently considerable support in Congress to take up corporate tax reform, and corporate reform is certainly needed. But I urge policy makers to remember that, as compared with about two million taxable corporations, there are 151 million individual taxpayers, including 27 million who report sole-proprietor or farm business income with their individual returns. There are also nearly nine million pass-through entities (S corporations and partnerships), the income from which is reported on individual income-tax returns. These taxpayers desperately need relief from the extraordinary compliance burdens the tax code imposes.

I have long believed comprehensive tax simplification is achievable by following the model of the landmark Tax Reform Act of 1986. Skeptics point out that asking taxpayers to give up tax breaks from which they currently benefit will generate pushback, and that’s certainly true. But if policy makers pair substantial reductions in tax expenditures with substantial reductions in tax rates, and maintain current tax-burden levels by income decile, I believe taxpayers will appreciate that their tax burdens on average won’t change much—and they will actually end up better off because they will save money on compliance costs. That approach prevailed 30 years ago, and despite some significant differences in circumstances, it could prevail again today.

I recommend that policy makers consider the following core principles in developing tax-reform legislation:

First, the tax system should not be so complex as to create traps for the unwary.

Health reform may be on life support and tax reform uncertain, but one part of the Donald Trump economic growth project is succeeding: deregulation. The question is whether the President will now rev up the effort.

President Trump last week signed the 13th bill repealing regulations through a potent tool called the Congressional Review Act (CRA), which allows Congress to reject rules in a majority vote within 60 legislative days of publication. The 1996 law had previously been used only once, when Congress and George W. Bush nixed an ergonomics directive from the Occupational Safety and Health Administration. Two other repeal resolutions have passed the House and are pending in the Senate.

The list of rejects includes the Interior Department’s Stream Protection Rule, which would have eliminated a third of coal-industry jobs and usurped state authority over mining, for little environmental improvement. Awaiting Senate repeal is the Bureau of Land Management’s venting and flaring rule for natural-gas fracking. That aimed to reduce methane emissions, though they have already dropped more than 15% since 1990 even as U.S. energy exploration has doubled in a decade.

Other worthy targets: A Federal Communications Commission regulation that would have forced Comcast to abide by consumer privacy standards that Amazon and Google could ignore. Sen. Ben Sasse (R., Neb.) moved a bill to deep-six a teacher training mandate that features incentives for teachers to avoid struggling schools that need talented instruction most. The left is spreading panic about potential sludge rivers or killer toys, but these reversals merely restore the status quo of six months ago.

Congressional Review actions do not include Mr. Trump’s executive orders, which have directed agencies to reconsider the trillion-dollar Clean Power Plan, the Labor Department’s financial advice diktat known as the fiduciary rule, among many others.

Then there are the rules that agencies have delayed and may eventually scrap, from micromanaging ceiling fan efficiency to organic farming standards. Sam Batkins at the American Action Forum estimates that 15 delayed rules alone would require 10 million hours of paperwork. That time could be devoted to activities that produce wealth and innovation, and the main losers would be compliance lawyers.

The White House and Senate Republicans have said the 60-day review period for Congressional Review Act measures will end next month. But our colleague Kimberley Strassel has explained how the law applies to past rules that agencies failed to report to Congress as required. The same is true for “guidance” letters, such as the Education Department’s sexual assault “Dear Colleague,” that were imposed with the force of law without having to go through a public comment period.

Each year legislators sharpen their knives, consider key constituent needs and meet to pass a budget. This year isn’t very different except that when the Republicans could not unify to replace the Affordable Care Act, unexpected questions about the party emerged.

The Democrats are united in opposition and after tasting Republican blood in the DC waters are vehemently opposed to compromise. For the Republican leaders, the challenge in keeping the Freedom Caucus in tow. The party appears to be riven by the schism between pragmatists and idealists.

Some Republicans contend they are worried about repeating the experience of 2013 when the party drew most of the ire over a partial shutdown. However, a Republican Congress shutting down a Republican government would be the height of folly.

President Trump has requested new funding for the extension of the Wall with Mexico. He also wants to boost military spending to the tune of $54 billion. It is unlikely he gets all that he wants. The question is does he get enough to declare victory.

Apart from a need to pass the budget, Republicans have other big ticket items they seek to complete this year, including the tax code. This is no time to appear timorous, but the Republicans should not be overconfident either.

The budget will be the next big test on whether party unity can transcend the party’s divisions. Trump and Ryan have to demonstrate they can maintain party discipline. The public jury awaits an answer.

One matter is clear, the Trump agenda cannot be held hostage to the Freedom Caucus. This is the time for Trump to assert, he is president and cannot be intimidated by a minority in the party. At the same time Trump will need consensus to increase the defense budget. The revision of Obamacare is a more formidable task than budget approval. But it is no less important. With the failure to address Obamacare, Trump cannot abide another loss. The symbolism alone, with a press corps out to nail him, would be devastating.

The Irish Republican Socialist party and Sinn Fein still dream of a unified Irish republic. The Catalan Solidarity for Independence coalition would see the Estelada flag raised over an independent Estat Català, and there are independence-minded movements as far-flung as the western Sahara. The Uhuru Movement is a kind of separatist movement standing on its head, looking to transcend national borders (with their colonial histories) and unite African people in a single African identity. The United States has the Texas Nationalist Movement hoping to restore the Republic of Texas, and somewhere out there is a very committed fellow who believes himself to be the rightful king of Hawaii. There is a more plausible movement for an independent Puerto Rico and a much less plausible movement for an independent California. All of these have something in common.

Russians.

Weird, right?

The movement for Californian independence expects to have an initiative on the 2018 ballot, which would in turn lead to a 2019 referendum. The organizers of the “Yes California” campaign say that winning the referendum would be only the first step in the long and complex process of establishing a free and independent California, finally liberated from the grasp of Washington and, especially, of the military-industrial complex. “Peace and Security” is, in fact, Exhibit A in the case for Calexit, and the organizers complain that the U.S. government “spends more on its military than the next several countries combined. Not only is California forced to subsidize this massive military budget with our taxes, but Californians are sent off to fight in wars that often do more to perpetuate terrorism than to abate it. The only reason terrorists might want to attack us is because we are part of the United States and are guilty by association.”

If that sounds like it could have been written by Ron Paul or some lonely disciple of Murray Rothbard, that is no accident: The leadership of the California-independence movement has a distinctly paleo smell about it.

“When I talk to people about California independence, they always say: ‘Well, what would you do if China invades?’” says Yes California president Louis Marinelli from his home in . . . Yekaterinburg, formerly Sverdlovsk (city motto: Don’t call us Siberia), an industrial center on the edge of the Ural Mountains in Russia. “Seriously,” he asks, “when’s the last time China invaded another country?” I mention the obvious ones: Tibet, India, and the Soviet Union. There’s Vietnam and Korea. Marinelli is a young man; perhaps much of this seems like ancient history to him. It does not to the Indians, or the Russians, or the Vietnamese, or many others. “No, I mean: When’s the last time China crossed an ocean to invade another country?” he clarifies. “Only the United States does that.”

Only?

The American war machine must surely be of some intense concern to California’s would-be Jefferson Davis, inasmuch as there is no legal or constitutional process for a state’s separating from the Union, a question that was settled definitively if not in court then just outside the courthouse at Appomattox.