Trump’s opening pitch for tax overhaul
President Trump promised to “bring back Main Street” as he launched a major push for tax reform this week, telling workers at a manufacturing plant in Springfield, Mo., that Republican plans to cut corporate and personal taxes and to simplify the tax code were “pro-growth, pro-jobs, pro-worker, and pro-American.” In a populist pitch that was light on detail—including specific tax rates— Trump urged Republicans and Democrats to work together to relieve “the crushing tax burden” on companies and workers, and to eliminate “special interest” loopholes. “Our tax system should benefit loyal, hardworking Americans,” said Trump. The event was expected to be the first in a series of tax speeches as the president tries to rally the public behind a major Republican legislative priority, months after his party’s bid to repeal Obamacare ended in disarray.
Congressional Republicans and the White House reportedly remain divided on a number of issues—particularly whether to scrap state and local tax deductions, and whether to lower the cap on mortgage interest deductions. In April, Trump proposed slicing the corporate tax rate from 35 percent to 15 percent; Republican leaders, though, believe such a massive cut would shrink tax revenues too much and think the rate will end up between 22 percent and 25 percent. Senate Minority Leader Chuck Schumer said Democrats would oppose any plan that includes tax cuts for the wealthiest 1 percent. “The Republicans,” he warned, “have already seen what happens when they go it alone in a partisan way, with health care.”
What the editorials said
Republicans need to move fast on taxes, said the New York Post. After years of sluggish growth, the economy is finally picking up pace, “thanks to Team Trump’s deregulation and other executive initiatives.” But the president can’t fulfill his promise of vigorous economic growth and “jobs, jobs, jobs” without comprehensive tax reform. Trump’s speech this week was a good start, but perhaps he should “send Vice President Mike Pence to camp out on Capitol Hill to lead the on-hands work.”
If Republicans do succeed in passing a tax bill, don’t expect it to be fiscally responsible, said The Washington Post. GOP lawmakers have repeatedly promised that their plan will be “revenue-neutral,” meaning the rewritten tax code will raise as much revenue as the old one and not increase the national debt. But staying revenue-neutral isn’t easy when you’re slashing tax rates for the wealthy, so Republicans are contemplating using various accounting tricks to hide the fact that they can’t balance the books. When it comes to Republicans and taxes, “not only promises were made to be broken, but rules were, too.”
What the columnists said
Trump’s plan to cut taxes fits perfectly with his populist “Make America Great Again” message, said Stephen Moore in TheHill.com. When Presidents Reagan and Kennedy cut taxes, they “unleashed a spurt of prosperity, job creation, and revenue growth.” The middle and working classes will especially benefit from a lower corporate tax rate, which would leave companies with more money to invest and spend on workers, in the form of new jobs and higher wages.
That’s a tired conservative “myth,” said Sarah Anderson in The New York Times. In reality, companies rarely pass tax savings on to ordinary Americans. Take AT&T, which paid an effective corporate tax rate of 8 percent from 2008 to 2015 “by exploiting tax breaks and loopholes.” During those eight profitable years, AT&T reduced its total workforce by nearly 80,000 jobs while splurging more than $34 billion on stock repurchases and executive compensation. Corporate executives enjoy tax cuts—but they aren’t so “good for the rest of us.”
“Trump’s pivot to taxes is fraught with pitfalls,” said Sahil Kapur in Bloomberg.com. Republicans remain split over basic questions, like which deductions and loopholes to eliminate, which income groups to reward with the heftiest tax cuts, and whether any cuts should be permanent. As with the health-care fight, strong White House leadership is essential to resolve these differences—yet it’s not clear our divisive and temperamental president can provide it. But “failure is not an option,” said David Bossie in FoxNews.com. Without tax reform, the governing GOP faces the prospect of entering the 2018 midterms without a single legislative achievement to its name. “Republicans in Congress are at a make-or-break moment and everyone knows it.” ■