Opinion | Donald Trump Wants to Raise Your Taxes
These numbers would grow over time, for reasons Ill explain. Ultimately, the plan would be likely to hurt the finances of the vast majority of Americans. No wonder it is starting to look politically vulnerable. Last week, a precursor bill barely passed the House, receiving 20 no votes from Republicans, many worried about the tax increases.
Republican leaders certainly have a path to passing a tax bill, because nothing unites modern Republicans the way a tax cut does. But the opposition to the recent health care bills also started as an underdog and managed to prevail, by relentlessly talking about the bills effects. When enough Americans understood the truth, enough members of Congress felt pressure to vote no.
The same could happen on taxes. It is already starting to. Recent polls suggest the plans approval rating is only about 30 percent.
To understand the Trump tax increases, you should first acknowledge the most admirable feature of his plan. It doesnt aspire to be merely a tax cut. It aspires to be tax reform both cuts and increases. Some deductions shrink, while rates fall, in the name of simplifying the tax code.
But after this promising start, the plan commits its cardinal sin. It places the highest priority on huge tax cuts for the very wealthy. They get lower rates and get to keep cherished tax breaks, like the carried interest loophole. Herbert Hoovers Republican Party wanted to put a chicken in every pot. Donald Trumps wants to put a yacht at every private dock.
Having lavished so much money on the wealthy, the tax package or at least the vague framework that the administration has released doesnt have much remaining to spend on middle class and poor families. For them, the package is a mix of pluses and minuses. Many face a lower tax rate, but some face a higher one, and many families lose deductions.
The combination creates a lot of losers. Reduced deductions for children, for example, hurt large families, notes N.Y.U.s Lily Batchelder. And the deduction for state and local taxes also a target for cuts now benefits 30 percent of households nationwide. It was the main reason for last weeks House defections, and the tensions over it havent been resolved.
Then there are the long-term problems I mentioned earlier. First, Trumps plan takes a skimpy approach to inflation adjustments, which will push many families into higher tax brackets over time. Second, the plan would radically increase the federal deficit, and when it comes to the deficit, what goes up must eventually come down. At some point, the government will need to pay its bills, through a combination of tax increases and spending cuts.
Virtually any future deficit-reduction plan except for a repeal of the Trump tax plan would hurt most families more than his plan helps them. This chain of events has happened before. The Reagan and George W. Bush tax cuts may have at first seemed to help the middle class and poor. But the deficits led to later cuts in education, medical research, transportation and anti-poverty programs that almost surely erased the benefits of a modest tax cut. Already, todays congressional leaders are talking about sizable cuts to Medicare and Medicaid.
Trump and his allies are feverishly trying to claim their plan really would benefit the middle class. Their latest talking point is the notion that corporate tax cuts will create an indirect windfall for workers. Funny, though, how the wealthy get most of the direct benefits, while everyone else has to hope for indirect ones somehow to materialize.
The main lesson of this years health care battle was the political power of facts. They dont always win the day, but its better to have them as an ally than an enemy. Right now, facts are the biggest problem for Trumps tax plan.
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Opinion | Donald Trump Wants to Raise Your Taxes