President Trump spent Tuesday attempting to will a major new tax cut into existence.
It’s not clear how many details Trump and the White House have worked out for his surprise proposal to cut 10 percent for middle income earners, including how he would define middle income, how he would keep the multibillion or trillion-dollar tax cut from adding to the deficit, or whether he has support from congressional Republicans, who remain in the dark as to what he wants, as do members of his own administration.
Observers view Trump’s remarks as more aimed at midterm election results than crafting new policy, but they left open the possibility that Trump could find a way to follow through to turn a last-minute campaign promise into reality.
The latest sign Trump’s middle class tax cut commitment was off-the-cuff came Tuesday morning, as the administration’s top economist turned down a chance to talk about it.
“So, right now, the person who’s discussing the 10 percent tax cut for the White House is the president, and so you should go to the press office and to the president if you want more information on that,” Council of Economic Advisers Chairman Kevin Hassett said during a press call on a different topic Tuesday morning.
Outside observers echoed the sentiment in terms Hassett might not be able to use regarding his boss.
“The caveat here is, who knows what Trump is thinking?” said Kyle Pomerleau, a lead economist for the Tax Foundation, a conservative-leaning think tank that supported last year’s tax reform effort. “Like everything, I think this was conjured out of thin air, spur of the moment,” he added.
Pomerleau pointed out that if Trump used a loose, previous definition of “middle class,” any earners making less than $250,000 a year, then a 10 percent tax cut would cost the government about $2 trillion over 10 years — about $500 billion more than all of last year’s cuts over the same period of time.
Trump added on Tuesday that Republicans in the House of Representatives would introduce a resolution on the topic next week.
“It’s going to be a resolution,” Trump told reporters in the Oval Office. Congressional resolutions don’t require the president’s signature, and thus usually aren’t binding the way bills passed into law are. Trump added that House Ways and Means Committee Chairman Kevin Brady, R-Texas, had been working on the resolution.
Brady’s office declined to comment. In a separate statement the influential Texas lawmaker made a modest commitment to work on Trump’s proposal, provided Republicans maintain control of the House and Senate next year.
In a Tuesday interview with the Wall Street Journal Trump also promised his surprise cut would not add to the national debt, though he declined to elaborate as to how he planned to offset lost revenue to assure that. His Tuesday remarks conflicted with a statement put out by the White House press office on Monday, after Trump’s surprise tax cut proposal caught conservatives off-guard, elaborating that the president wanted his proposed new cut added to a bill that the House passed in September.
A Republican former aide who requested anonymity to speak freely compared Trump’s remarks over the weekend and on Monday to a promise Trump made during last year’s tax reform push.
At one point last year, on a Friday, Trump pledged to release the administration’s tax plan within a week.
“It was written between when he said it and when it was put out there,” the former aide said.
The new tax law has been less politically successful than Republicans hoped, in part due to criticism from Democrats that it advantages corporations more than individuals. The corporate tax cut passed last year is permanent, but due to budgetary and procedural reasons the tax cuts for individuals were made temporary, and are due to sunset in 2026.
Last year’s tax law advanced due in large part to procedural maneuvering by Republican leadership in the House and Senate. Congressional Republicans used a process called budget reconciliation that allowed the Senate to pass the law with a simple majority, rather than the usual 60 votes necessary to end debate on a particular bill. A budget resolution necessary to pull a similar tactic has yet to be introduced, and most observers, even those supportive of additional cuts, think it would be too difficult to accomplish in a lame-duck session of Congress.
“That seems beyond fanciful,” said the Republican former aide, who added that he didn’t see Senate Republicans taking another tough vote on taxes this Congress.
Democrats have also attacked Republicans over a major increase to the federal deficit that they argue the tax cuts caused. Last week, the Treasury released a report showing the federal deficit rose over $100 billion, to $779 billion, in the last fiscal year.
Observers across the board agreed that Trump’s announcement seemed more like a promise in search of substance.
Still, there was one way Trump could fulfill his promise of a middle-class tax cut, even without Congress, Pomerleau argued.
“They can repeal all the tariffs that they enacted and that would cut taxes for the middle class. That’s the equivalent of a $40 billion tax cut for the middle class,” per year, Pomerleau said.
