President Trump tweeted on Friday:
Republicans must start the Tax Reform/Tax Cut legislation ASAP. Don’t wait until the end of September. Needed now more than ever. Hurry!
One can certainly understand the president’s sense of urgency here, even though the specifics of his proposals haven’t fully congealed. After failing to repeal and/or replace Obamacare, Trump is looking for a victory – any victory – that can help him maintain the illusion of effectiveness going forward. A big, juicy tax cut would fit the bill perfectly.
The problem is that it’s becoming increasingly difficult to determine what kind of big, juicy tax cut would be best. As former presidential candidate Mitt Romney infamously pointed out in a closed-door session with donors, 47 percent of Americans no longer pay any income taxes at all, which means that slashing income taxes would have little to no direct benefit to many of Trump’s rank-and-file supporters.
That may be why Trump focused on a corporate tax cut on the campaign trail. And there seems to be some momentum moving in that direction.
A Trump policy that is pro-growth, and pro-American
Trump’s campaign proposal was a maximum corporate tax rate of 15 percent. That would be a massive reduction from the current 35 percent top rate. It’s also a very good idea, given that the United States has one of the highest corporate tax rates in the industrialized world.
In all of Trump’s protectionist rhetoric designed to punish businesses who dare to do business in places where they can make more money, this is the one proposal that’s a carrot instead of a stick. A 15 percent rate would lure back a significant amount of lost revenue that left the U.S. when it became too expensive.
Of course, getting Congress on the same page with the president has proven next to impossible — unless congressional Democrats can once again exploit the president’s nonexistent party loyalty to their advantage.
Trump’s unilateral capitulation on the debt ceiling has proven that he’s happy to cut a deal even if all he gets is a chance to stick a thumb in the eye of House Speaker Paul Ryan.
So, naturally, no one should be surprised if the Wisconsin Republican is willing to stick his own thumb right back. The House Speaker has essentially said that the 15% corporate rate is a non-starter. “Numbers are hard to make that [15 percent rate] work,” Ryan told a forum of The New York Times on Thursday.
Ryan is aiming for something in the range of the mid-twenties, but he’s unwilling to get specific beyond that.
The lack of specificity on both sides suggests that we’re still quite a long way from an actual plan.
(White House photo of President Donald Trump attending a corporate tax cut rally at Andeavor Refinery, September 6, 2017, in Mandan, North Dakota, by D. Myles Cullen.)