President Donald Trump is in campaign mode and he seemed to make a new pledge Tuesday night, saying he would offer some kind of new tax cuts before November.
“We’re going to be submitting additional tax cuts sometime prior to November,” Trump said during a speech to the anti-abortion rights group Susan B. Anthony List.
And that was it. No specifics. No more information.
What happens in November? Midterm elections. Could the promise of new tax cuts excite the GOP base and help them ward off the anti-Trump fervor expected to drive Democrats to the voting booth?
The funny thing here is that Republicans just passed a massive and thorough slate of tax cuts, permanent for corporations and temporary for individuals. It was supposed to be a wholesale restructuring of the US tax code.
And they didn’t do it overnight. Even though Republicans had been licking their lips for years at the prospect of slashing corporate tax rates to give American businesses more room to grow, it took pretty much all of 2017 for them to get the job done.
Granted, they had no help from Democrats, but it was a tortured process in which they had to focus all their power on Capitol Hill.
It wasn’t easy.
And it hasn’t yet turned out to be very popular.
An NBC News/Wall Street Journal poll asked if the Republican tax law was a good idea. Just 27% said it was. Thirty-six percent said it was a bad idea and 34% had no opinion. Republicans were the only partisan group in which a majority (56%) favored the law. Just 6% of Democrats and 26% of independents agreed.
Granted, many of the benefits for individuals don’t kick in until Americans file their taxes next April, but Republicans had clearly hoped that delivering on a long-stated promise of tax reform would pay off.
So – putting aside the possibility that Trump is just trying to find a way to remind people about his great and only major legislative win – it’s a little unclear why he would be vaguely proposing new tax cuts to be unveiled in tandem with Election Day.
Which taxes, exactly, would be cut, and how would they be paid for?
Passing the first round of tax cuts is a move that is already giving budget hawks heartburn – though not enough to vote against it. The new tax law is slated to help push US deficits over $1 trillion as soon as 2020 and $2 trillion by 2028 unless or until the economy, which has been on a tear, grows even more to pay for them. Or the US government will have to further tighten its belt, cutting spending or reforming things like Social Security and Medicare, an effort which would lead to frustrations of its own.
There is also some evidence of buyer’s remorse on the cuts that already passed. And perhaps that’s some of what’s behind Trump’s comments. There’s more to do!
Sen. Marco Rubio pointed out this tension in an interview with The Economist in early May when he implied the cuts arguably did more for corporations than for people. He later clarified they did a lot for people, too.
“There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers,” Rubio told The Economist. “In fact, they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”
Americans remain bullish on the economy, however, and they trust Republicans more on that issue.
We’ll have to wait and see what exactly Trump meant and whether his comments are a precursor of a new tax cut effort, better than the old tax cut effort.