President Trump has lobbed some whoppers during his 19 months in office: Democrats are organizing a caravan of Honduran migrants hoping to enter the United States illegally. US Steel is building six new steel mills. His poll numbers are the highest ever for a Republican president.
If none of those is your favorite, there are nearly 5,000 other lies and misstatements Trump has uttered since becoming president. And then there’s a new one.
With the midterm elections two weeks away, Trump now says the White House is planning a “major tax cut for middle-income people” that he’ll reveal right before the election. Trump told reporters Oct. 22 that he’ll produce a “resolution” calling for a 10% tax cut for middle-income earners.
For those wondering if it really works this way—no, the president can’t roll out a tax cut on short notice like this. There’s no procedure for cutting taxes via presidential resolution. Only Congress can initiate a tax cut (or hike) and Congress is out of session until after the midterms. So it’s impossible for Trump to cut taxes in time to buy your vote, as he seems to wish he could.
Trump mentioned this new tax cut idea in a session with reporters after a Nevada rally on Oct. 20. One can only imagine the urgent questions among Trump’s aides: Does he really mean it? Are we now going to make it look like there’s an actual plan for this? Or will this be a one-time, fire-and-forget Trumpism?
Looks like it’s a keeper. On Sunday, Treasury Secretary Steven Mnuchin tried to make it sound like there’s a thorough plan in the works, telling the New York Times, “this is specifically focused on the middle class and not beyond that.” But he didn’t have details on what tax brackets might quality for a reduction, or anything else. But don’t worry, a crack team of panderers is working on it.
Key Congressional Republicans, such as House Speaker Paul Ryan and House Ways and Means Committee Chairman Kevin Brady, apparently knew nothing about the express tax cut Trump had in mind–even though all tax legislation must originate in the House. But now, they say, oh, yeah, sure, Trump can outline a tax plan Congress can vote on later. So now it seems likely Trump and perhaps some other Republicans will make this part of their closing argument as voters decide whom to vote for.
If this all seems redundant, here’s why. Last year Trump signed a large, $1.5 trillion tax cut, with zero Democratic support, that was supposed to grease the midterm elections as voters everywhere thanked Republicans for all the extra money. Except many voters don’t feel they got any tax cut at all. Instead, they think the bulk of the tax cuts went to businesses and the wealthy, with crumbs left for middle-income families.
Data support that. The Trump tax cuts slashed the corporate tax rate from 35% to 21%, which has pushed taxes paid by businesses to record lows. Federal revenue from business taxes in fiscal 2018, which ended in September, plummeted by 31%. Taxes paid by individuals, however, rose by 6.1%.
Corporate profits, meanwhile, are up 15.4% this year. Average incomes are up by just 2.8%. And the annual deficit jumped 17%, to $779 billion, and is probably headed past $1 trillion for fiscal 2019. You can kinda understand why voters are skeptical.
Two weeks before the election, tax cuts that were supposed to clinch the midterms for Republicans instead threaten a Democratic takeover of the House, with more people disapproving than approving. So Trump had the bright idea to try for a redo. Oh, wait—there’s already one redo effort underway—a “second phase” Republican tax-cut plan that passed the House in September, but seems to have no chance of getting the 60 votes needed to pass the Senate.
Trump seems to be trying to convince voters that a theoretical tax cut he lacks the authority to implement will resolve all the things they don’t like about the tax cut Republicans have already passed. Just close your eyes and wish your paycheck were larger. Then cast your vote before you open them.
Confidential tip line: [email protected]. Click here to get Rick’s stories by email.
Read more:
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman