GOP Facing a ‘Nightmare Scenario’ With Trump’s New Tax Cut For Himself Gambit
Earlier this week, President Trump rolled out a plan for another big tax cut for guys like him. And while his Republican allies celebrated the announcement, they also worry this would be a “nightmare scenario” for the party.
With profits soaring to record levels and net investment near record low, giving corporations more cash makes absolutely no sense because it won’t lead to job creation. But Donald Trump and his Republican allies in Congress think the wealthy don’t have quite enough money yet. So, on Wednesday, they rolled out a plan for another big tax cut for guys like Trump.
But Americans are fully aware that this tax cut is not for the middle class and wonder why they are bothering with tax cuts for corporations when there are so many other more pressing problems.
Today, most Americans aren’t clamoring for lower taxes, probably because nearly half of Americans owe no federal income tax at all.
Americans do pay taxes: payroll taxes to fund Social Security and Medicare, tariffs, excise taxes, corporate taxes, property taxes, sales taxes, state and local income taxes, and so on. But if they have a problem with taxes, it’s not with the federal income tax.
So a bill that cuts federal income taxes for middle-class is a sad way of camouflaging the real intent of the bill: Giving millions of dollars to the very wealthy, who happen to be the only people who are really benefiting from our uneven economic growth.
House Speaker Paul Ryan calls tax cuts the “secret sauce” for a better economy. But that the secret sauce is just the same old ketchup and mayo.
The gimmick could backfire on Republicans and Trump knows it. So he has built an escape hatch from his own tax plan, resisting the framework that had been cooked up by congressional leaders, plus economic adviser Gary Cohn and Steve Mnuchin, Axios reported.
The situation left Republicans on the Hill genuinely uneasy. They also fear that Trump’s tax returns could come back with a vengeance.
You can expect to hear lots (and lots) more about Trump’s taxes in the coming months as Congress debates the tax reform plan.
Senate Minority Leader Chuck Schumer has made clear he views Trump’s refusal to release his tax returns as a major stumbling block in the attempts to get tax reform done.
“It’s going to be much harder to get tax reform done if the President doesn’t disclose his taxes,” Schumer said back in April. “For the very simple reason that when there is a provision in the bill, people are going to say, ‘Oh, this is for President Trump and his business, not for the benefit of the American people.'”
As Republicans’ failure to repeal and replace Obamacare makes clear, the 52 seats the party currently controls in the Senate leaves them very little margin for error. Being able to convince a Democrat or two to be for tax reform would certainly improve the chances of some sort of legislation passing.
If Trump shows the fickleness he showed on repeal-and-replace (championing the House plan, then later calling it “mean”), that could increase the chances the plan sinks, with him blaming Congress.
For that reason, Republicans worry that Trump’s erratic behavior could leave the party with no health care repeal and no tax reform. If they botch this, as they did health care, both chambers could lose their Republican majorities.
This article first appeared on BlueDistrict.com. Printed with permission.