President Trump surprised many observers when he announced a unilateral change to the tax code at the weekend, suspending payroll taxes with a view to permanent cuts after the election.
Critics were quick to point out that major changes to taxes fall entirely to Congress, and the proposal has little support among either party on Capitol Hill. Trump conceded his plan would likely spark a legal battle.
But the presidential memorandum — signed at his New Jersey golf club on Saturday evening along with two executive orders and a second memorandum — comes as part of a strategy designed to showcase the president as a man of action and, in this case, lay a tax trap for presumptive Democratic presidential nominee Joe Biden, challenging him to defend middle-class taxes.
A former White House official said it was designed to shift the focus on to Biden.
“The president has been keen on this for a long time, so it wasn’t conjured out of thin air,” the official said. “But at the same time, does it raise awkward questions about raising taxes for a socialist candidate who would rather stay in his basement?”
After a week in which the White House failed to reach a coronavirus relief deal with Democrats, the weekend brought a chance for Trump to regroup and strike back. He spent it at his Bedminster golf club, meeting with close advisers and holding two news conferences with an audience of club members providing applause and cheers.
He tried to sidestep Congress with his own tranche of relief measures, announcing that he was helping people “stay in their homes” by extending an extra unemployment benefit of $400 a week and waiving student debt payments through the end of the year. He also announced a payroll tax holiday until the end of 2020.
“If I’m victorious on Nov. 3, I plan to forgive these taxes and make permanent cuts to the payroll tax,” he said during the news conference. “I’m going to make them all permanent.”
Trump campaign officials privately concede that they have struggled to define Biden in the minds of voters. Muddled messaging has tried to convey that Biden is incompetent and, at the same time, a dangerous threat to America. That has hampered the campaign’s efforts to shift the election from being solely a referendum on Trump’s time in office to an examination of both candidates.
Robert Shapiro, professor of political science at Columbia University, said the payroll tax announcement was a clear effort to trip up Biden by forcing him to defend higher taxes.
“It is a tax trap of a sort in that Biden would be opposing a tax cut,” he said. “But he can make a strong case that this particular tax cut is a bad idea. For one, if the goal is to aid people who are out of work, then this tax does not help them.”
Both sides have been aware of the damage that can be done by the middle-class tax trap since 1984, when Walter Mondale tried a new way of doing things by comparing himself to Republican President Ronald Reagan, highlighting how they both would reduce the budget deficit and national debt.
“Let’s tell the truth,” Mondale, the former vice president, said as he accepted the Democratic nomination. “Mr. Reagan will raise taxes, and so will I. He won’t tell you. I just did.”
He lost in a landslide.
Shapiro said the Trump plan had deeper flaws that played to Biden’s strengths.
“Further, the tax has a despicable subtext, which is that the payroll taxes fund Social Security and Medicare, and cuts in these taxes will lead to defunding these programs that are very widely needed and supported,” he said.
And that was how Biden responded, sidestepping the tax trap by casting himself as the protector of Social Security.
“They are just another cynical ploy designed to deflect responsibility. Some measures do far more harm than good,” Biden said.
“One order is Donald Trump’s first shot in a new, reckless war on Social Security.”
