Republicans want to pass a large tax cut for high-income households. We know that because the House GOP’s tax reform blueprint features large tax cuts for high-income households, all the various iterations of Donald Trump’s campaign tax plans featured large tax cuts for high-income households, and all throughout Barack Obama’s first term, Republicans fought relentlessly to prevent the expiration of George W. Bush’s temporary tax cuts for high-income households.
The big problem with this agenda is that it’s hideously unpopular.
According to a Washington Post/ABC News poll released on September 22, for example, conservative Republicans oppose cutting taxes on higher-income people by a 42-50 margin. That’s not the overall public — that’s conservative Republicans. Naturally, Democrats are even less supportive, opposing such tax cuts by a staggering 33-62 margin. White men without a college degree — Trump’s demographic base — oppose a tax cut for the rich by a 37-60 margin, with women, nonwhite people, and college graduates all even more opposed. Rural voters oppose cutting taxes for the rich by a 36-60 margin, and suburban and urban voters are even more opposed.
No major group of Americans except Republican Party donors and elected officials wants this policy. But Republicans are trying to pass it. So the plan is to sell it by not talking about it at all.
Trump’s four principles for tax reform leave something out
In remarks Tuesday after a meeting with House Republicans on the tax writing committee, Trump laid out what he described as his four core principles for tax reform: simplifying the tax code, cutting taxes “not just a little bit, but tremendously” for the middle class, lowering the tax rate for businesses, and bringing back money from overseas.
Cutting taxes on rich families didn’t make the cut.
One could obviously quibble with various aspects of this, especially Trump’s treatment of the “wealth parked overseas” issue. But the basic framework Trump is describing sounds reasonable enough as an agenda — the corporate tax system really is a mess, and most people would enjoy paying lower taxes. It simply doesn’t describe the actual plan that Republicans are coalescing around, one that features a big cut in the top income tax rate and opens up a big new loophole for rich people who get money through partnerships.
Trump should consider making his fake tax plan real
As a legislative actor, Trump appears to shift somewhat erratically between two different modes. Most of the time, he operates as a hyperpartisan, hard-edged conservative ideologue who endorses Obamacare repeal bills that betray all his campaign promises. But from time to time, Trump operates as a culturally conservative populist with few formal ties to the institutional Republican Party who’s happy to cut deals with “Chuck and Nancy” on economic policy to get things done.
When Trump is talking about his tax policy, he sounds like this second Trump, and he comes across, frankly, as a fairly shrewd politician.
Everyone likes middle-class tax cuts, and there’s ample evidence from the previous Congress that Minority Leader Chuck Schumer and many other Democrats would love to do a deal that swaps new infrastructure spending for a business tax cut. Democrats won’t agree to a cut in rich people’s income taxes, and cutting rich people’s income taxes is unpopular, so a politically sound bipartisan deal just wouldn’t do that.
All indications are, however, that Trump’s actual tax policies are being written by the first Trump — the unappealing, hyperpartisan ideologue. The plan is for the first Trump to write a profoundly unpopular tax bill and then try to have the second Trump sell it to the public with misleading rhetoric.