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Pundits are breathlessly speculating about what President Trump’s promise to cut taxes for the middle class by 10 percent could possibly mean. They are wasting their time. Instead of worrying about what details may emerge, keep the following in mind:
- The Administration has no plan.
- Until the president spoke last week, apparently off the cuff, it was not working on such a plan. Neither was anyone in Congress.
- There is no chance Congress will cut anybody’s taxes next week since it is not even in session.
- There is no chance Congress will cut middle income taxes by 10 percent once it returns for a lame-duck session after the election.
- The president can’t say who the middle class is.
- Neither he nor his allies will say how they’d pay for such tax cuts, which could cost hundreds of billions a year, depending on who would benefit.
It seems fairly clear what is going on here. The president made a vague, it-sure-sounds-good, promise about a middle class tax cut last week. It sounded so good that he embellished it, then embellished it again. By Tuesday, it became reality, or at least what passes for reality in Washington these days:
Trump told reporters, “We’re giving a middle-income tax reduction of about 10 percent – we’re doing it now for middle-income people…We’re putting in a resolution sometime in the next week or week and a half, two weeks.”
But note the Trumpian hedging: “about 10 percent…putting in a resolution...sometime in the next week or week and a half, two weeks.” Later he said such a resolution would be proposed “later this week.”
What resolution? Apparently an unenforceable symbolic statement that it is the sense of Congress that taxes should be cut for the middle class by 10 percent. Up to you, but I wouldn’t take this to the bank.
This episode is perfectly consistent with the president’s MO: Make grandiose, attention-getting promises that never get fulfilled. Taxes are exhibit A.
In April, 2017, the White House scrambled to throw together a tax cut outline on short notice after Trump promised one. The result: A one-page outline of a plan.
One might argue that Trump’s blueprint presaged the real tax cut that Congress rolled out six months later. But in reality it was very different: It was almost four times the size of the Tax Cuts and Jobs Act and among other promises, vowed far lower individual and business income tax rates than Congress enacted as well as elimination of most business and individual tax preferences, which Congress never seriously considered.
In July, 2017 the White House and Hill Republicans scrambled to cobble together another quickie tax framework. This one was little more than a broad statement of principles. The only news from this framework: House Republicans agreed to scrap their ambitious destination-based cash flow tax.
The Big Six
Then in September, after President Trump demanded immediate action on a tax bill, Hill Republicans and the White House released their “Big Six” tax plan. This one was nine pages long and only vaguely resembled what would become the TCJA.
The White House itself never did propose a full-blown tax plan. Nor did it ever propose a specific plan to repeal-and-replace the Affordable Care Act. Or to finance the nation’s infrastructure needs. Or even to curb immigration.
Congressional Republicans, of course, did eventually write a tax bill and tried—but failed—to rewrite the ACA. But Trump’s ambitious promises of historic legislative initiatives simply never appeared.
So here we are again. The president is campaigning hard for state and congressional GOP candidates. He needs a talking point. As political red meat, the TCJA was a bust. So he promises that middle income voters will get another a tax cut. Next week.
His allies in Congress are scrambling to make it look like such a plan will emerge, but they seemingly can’t even bring themselves to get on board Trump’s tax cut train.
Trump’s promise of a big immediate middle-income tax cut never will be fulfilled. And we will all move on to the next shiny object.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
Evan Vucci/AP Photo