Trump tax plan just a bribe to voters to excuse his failure
Subscribe for unlimited digital access.
Try one month for $1!
Subscribe for unlimited digital access. Try one month for $1!
What does a president do when he has failed to fulfill every major promise he has made and it’s coming up on report card time?
Make another big promise, one as half-baked and unrealistic as the others, and claim it’s a win.
Eager to look like he’s charging ahead as he reaches his first 100 days in office on Saturday, President Donald Trump on Wednesday proposed a tax cut plan that is no plan at all. It is a bribe to voters to look the other way. It would drive up the federal deficit by $2 trillion to $7 trillion over a decade, favor the wealthy over the middle class and the poor, and put the American economy on the road to Kansas.
Remember Kansas? It was there, beginning five years ago, that the fact-free theory behind Trump’s tax reform proposal — deep cuts in taxes pay for themselves with an explosion of new businesses and jobs — played out in real life, with disastrous results.
A newly elected Republican governor, Sam Brownback, and the Kansas legislature slashed the top personal income tax rate and eliminated the income tax on most businesses — and Kansas has seen nothing since then but massive budget shortfalls, huge cuts in basic services such as road repairs and annual cuts to spending on schools. Kansas has fallen far behind its neighboring states in jobs and gross domestic product. A solid Midwestern state jumped down a rabbit hole.
Now Trump wants the whole country to jump down the same hole. He has called for reducing the corporate tax rate from 35 percent to 15 percent, and wants to double the standard tax deduction that individuals can take.
But the president has not proposed a real way to make up the lost revenue, and that middle-class tax cut may not be all it’s cracked up to be. The standard deduction would be higher, but itemized deductions — except for home mortgage interest and charitable giving — would be wiped out. That tax deduction for interest on your college loan? Gone. The federal deduction for state and local taxes you pay? Also gone.
In the meantime, Trump would eliminate the inheritance tax, the so-called “death tax,” even for super rich people like himself.
Ivanka, Tiffany, Eric, Donald Jr. and Barron should be pleased.
Trump is doing what Trump does: Promising what he can never deliver, trying hard to look good while doing nothing. He is revisiting the script from his failed promise to repeal the Affordable Care Act and replace it with better health insurance for “everybody.” The numbers didn’t add up then, and they don’t add up for his tax plan.
As in the fight to replace Obamacare, Trump will get plenty of resistance from Democrats, who reject the very notion that corporations are victims of excessive taxation. After accounting for deductions and tax credits, the typical American corporation does not pay taxes at a rate of 35 percent — among the highest rates in the world — but at an effective rate of 27.9 percent, which is almost equal to the average among advanced nations.
But Trump also will get blowback from Republicans, as he did before. Many Republicans, including House Speaker Paul Ryan, have expressed skepticism that big tax breaks really “pay for themselves,” as the mantra goes, and want to find replacement sources of revenue, such as higher taxes on imports. Trump is asking Republicans to forget that they like to think of themselves as the nation’s deficit hawks.
And then there is the great unknown: How would Trump’s proposed tax reforms hurt or improve his own bottom line?
At a White House press conference, Treasury Secretary Steven Mnuchin dismissed a reporter’s suggestion that Trump now, more than ever, should release his personal tax returns. He said the president had already released “plenty” of information.
But when a reporter then asked if Trump would pay more or less under his tax plan, Mnuchin undercut his own argument that the president’s tax returns are a non-issue. “I can’t comment on the president’s tax situation,” he said, “because I don’t have access to that.”
Trump wants to simplify America’s tax code. That’s a laudable goal, as anybody who just filled out their own tax return likely would agree. And taxes should be no higher than necessary, the rub being how different people might define “necessary.”
But Trump’s tax proposal is not a serious plan. It is Santa Claus in spring.
It is the work of a White House run by a flailing president with a fragile ego who is desperate to see a bump in the polls the next time he turns on Fox News.
Send letters to email@example.com.Tweets by @csteditorials