Outside the Beltway

Trump Spins Tales About A Non-Existent Tax Plan

Donald Trump is talking about a tax cut that appears to exist only in his own mind.

Doug Mataconis · Friday, October 26, 2018 · 17 comments

With less than two weeks to go until the midterm elections, and the tax cut plan that was passed in December obviously not reverberating with the public as a whole, President Trump is talking about an alleged tax cut plan that nobody else seems to know anything about:

The 2017 Republican tax cuts have been a dud on the campaign trail ahead of the November midterm elections, so President Trump has come up with a new plan: more tax cuts.

In Nevada on Saturday, Mr. Trump said he and Republican lawmakers had been working on “a very major tax cut” for middle-income people that would be rolled out in the coming weeks.

There is no chance of such a plan passing even the House before the midterms, let alone the Senate, because Congress is in recess through the election. So the move appears to be an effort to give Republican voters a jolt of enthusiasm as the polls are opening — and perhaps an acknowledgment of how small a boost Mr. Trump’s signature tax billseems to be giving Republicans in the battle to control Congress.

Steven Mnuchin, the Treasury secretary, said in an interview on Sunday that he had been working diligently with Representative Kevin Brady of Texas, the Republican chairman of the House Ways and Means Committee, to develop another tax plan that would be released “shortly.”

“This is specifically focused on the middle class and not beyond that,” Mr. Mnuchin said in Jerusalem on the first stop of his six-country Middle East trip.

Mr. Mnuchin said the president asked Treasury officials and Republican lawmakers to focus on developing a middle-class tax plan. But he could not offer details about which tax brackets might have lower rates or say if the package would include more generous deductions. Nor has anyone explained how — or whether — the plan would be financed or if it would again add to the nation’s ballooning deficit.

Trump talked about this supposed tax plan in a bizarre interchange with the press prior to leaving for a campaign appearance in Texas:

pic.twitter.com/VjBURpCuYv

— Daniel Dale (@ddale8) October 22, 2018

White House Press Secretary Sarah Huckabee Sanders repeated this nonsense on Fox Business Network this morning:

.@PressSec to @trish_regan on @POTUS saying ‘major tax cut’ on the way for middle class: "If anybody can get it done, it's President Trump." https://t.co/mZCKX3PyyJ pic.twitter.com/IzYtv80p0Z

— FOX Business (@FoxBusiness) October 23, 2018

The Hill notes that White House aides speaking to reporters have said that they have no idea what the President is talking about, and Politico notes that Trump’s claims about an upcoming tax cut have most of Washington scratching its collective head:

In recent days President Donald Trump has twice promised a new “major tax cut” ahead of the November midterm elections, mystifying White House officials, congressional leaders, and tax wonks around town who mostly have no idea what he’s talking about.

The pledge — which Trump repeated Monday afternoon — came as news to House and Senate lawmakers, who’ve already returned to their home states to campaign for the elections and have no plans to consider new legislation before then.

White House officials spent the day trying to decode what Trump meant because no one knew the substance of any such tax cut, or had seen any policy proposal related to it. Aides were left wondering what Trump had read in newspaper clippings, or seen on Twitter, to inspire this grand promise from his rally podium.

One senior administration official on Sunday night had not even heard about the president’s tax cut remark on Saturday in Nevada and said they had no idea what he was talking about. “I guess I’ll hear about it when I get to work on Monday,” the official said.

Trump said that House Speaker Paul Ryan was involved in crafting the plan. But Ryan’s office shed no light, referring questions back to the White House.

Trump first floated the idea on Saturday, saying that his administration is “studying very deeply right now round the clock a major tax cut for middle income people.” He upped the ante before leaving for a campaign trip to Texas on Monday, telling reporters at the White House that the administration plans to produce a “resolution” calling for a 10 percent tax cut for middle income earners. It was not clear what he meant by resolution. There are no current plans in Congress for any kind of large new tax cut for the middle class.

The GOP is already scrambling to avoid criticism for the ballooning debt and deficit under Trump’s watch. The president’s own Treasury Department reported last week that the deficit hit $779 billion in the 2018 fiscal year, the highest level since 2012, following the GOP tax cut bill and a massive spending increase in Congress. Jason Furman, who served as chair of the Council of Economic Advisers under President Barack Obama suggested a 10 percent middle class tax cut would cost roughly $2 trillion over ten years.

“This is the height of cynicism,” Greg Valliere, chief global strategist for Horizon Investments, said of Trump’s tax cut talk. “Number one, I think even Republicans would be gun shy about adding this much more to the deficit. And the public actually seems pretty indifferent to tax cuts. This doesn’t pass the smell test or the laugh test.”

One potential clue to Trump’s thinking: Sen. Kamala Harris (D-Calif.) released a tax proposal aimed at the middle class late last week. Some Republicans close to the White House speculated that Trump is trying to one-up his potential 2020 presidential rival.

Or Trump could have been referring to a proposal out of his Department of Labor that would expand access to 401(k)’s for people who work for small businesses, said Stephen Moore, an informal economic adviser to the Trump campaign and distinguished visiting fellow at the Heritage Foundation who, despite his own deep relationships in the White House, was also left wondering about Trump’s ‘major tax cut’ rhetoric.

As for Capitol Hill, Senators are saying there’s no chance of a new tax bill passing this year:

The Senate is ”highly unlikely” to pass a 10 percent tax cut for the middle class even after the midterm elections, GOP Sen. Orrin Hatch told reporters on Capitol Hill Wednesday.

“I’ve seen miracles happen before,” the retiring Utah Republican said. But he added that it would take “a real monumental effort” to get anything like Trump has proposed to rally Republicans to the polls for the Nov. 6 midterms through the Senate.

Tax and election analysts have dismissed Trump’s tax proposal, which caught House and Senate GOP aides off guard Saturday when he first mentioned it, as a clear political gambit to appeal to his base of blue-collar supporters.

Trump originally promised last Saturday that if Congress pushed through a 10 percent tax cut for “middle-income people,” it would happen soon — “sometime just prior, I would say, to November,” he told reporters as he headed for Air Force One after a campaign rally in Elko, Nevada.

Then, on Monday, he backtracked, saying he expects that tax-reducing measure to be introduced, not completed, in the coming days, even though both the House and Senate are in recess as members hit the campaign trail less than two weeks before Election Day.

Hatch declined to answer whether he has discussed such a tax cut with the president. Instead, he defended Trump’s improvisational, stream-of-consciousness leadership style.

“I can’t say I don’t know anything about it,” Hatch said. “But, you know, he’s an interesting man and he’s a very good leader. And he does things the way he wants to do them and he’s been pretty successful, so far so I’m going to be the last to criticize him, I’ll put it that way.”

Reading Trump’s remarks to reporters and his comments about this tax plan both over the weekend and last night in Texas, it actually seems as though the President believes that Republicans can somehow get a new tax cut passed in one week even though there has been no bill proposed and that Congress isn’t even in session. In reality, I doubt that this is the case. In his twenty months in office, Trump has displayed ignorance about many things involved in governing and legislating, but even as big a Trump critic as I doesn’t think that the President actually believes that he can pass a tax cut without going through Congress. Instead, this seems to be yet another example of Trump pushing out nonsense to distract the media and appease his base. On the first hand, getting reporters chasing a story about a non-existent tax plan gets them off talking about things such as the Khashoggi murder, the Russia investigation, and other matters that are problematic for the Trump Administration. On the second hand, telling his supporters that there’s going to be another tax cut, even though there’s not even a plan on the table and that there’s no chance that anything of the sort will be considered by Congress before next January, at which point at least one chamber of Congress could very well be in the hands of the opposing party. Finally, talk about yet another tax cut, however fictional it might actually be, is also likely aimed at ramping up enthusiasm among Republican voters in the final two weeks of the campaign. For these two groups of people, which are virtually indistinguishable at this point, whether or not the GOP actually ever follows through on this mythical tax cut doesn’t really matter.

As Steven Goldstein notes at CBS Marketwatch, the fact that the President is pushing the idea of an additional tax cut is a good sign that even he recognizes that the December 2017 tax cuts aren’t very popular with voters:

President Donald Trump seems to have finally recognized the obvious: The American public doesn’t believe the tax-cut bill he signed into law in 2017 is benefiting them.

That can be the only explanation for his jaw-dropping contention — so incredible it really needs to be heard to be believed — that the White House and Congress are working on a “major” pre-election middle-income tax cut.

To be clear, no middle-income tax cut is coming. Congress isn’t even in session, and, if you recall, the Tax Cuts and Jobs Act could only pass by being included in a filibuster-proof reconciliation bill.

On Monday afternoon, Trump clarified that what was being considered was a legislative proposal — and he acknowledged that it would not be enacted until after the election. He said he was targeting a 10% reduction for middle-class taxpayers.

However real — on a scale of not particularly real to totally imaginary — the new Trump tax-cut idea represents recognition that the big tax overhaul hasn’t paid significant dividends for most Americans.

And Jim Tankersley notes at The New York Times that Trump’s tax cuts are not going to happen:

[T]o be clear: It will not be put in place next week, or even this year, despite what the president says.

Mr. Trump first floated the possibility of a new tax cut for the middle class at a rally in Nevada on Saturday. Soon after, Treasury Secretary Steven Mnuchin told reporters traveling with him in the Middle East that he had been working with Mr. Brady on a plan that would be released “shortly.”

Mr. Mnuchin, however, offered no details on what the plan might contain.

Lobbyists have not heard of it. Nor have tax analysts. “No idea really,” said Steven M. Rosenthal, of the Tax Policy Center, when asked about the plan. “I, like everyone else in Washington, was caught off guard by the announcement,” said Kyle E. Pomerleau of the Tax Foundation.

In a call with reporters on Tuesday, the chairman of the White House Council of Economic Advisers, Kevin Hassett, also referred questions on it to the White House press office.

“Right now, the person who is discussing the tax cut for the White House is the president,” Mr. Hassett said.

In other words, all this talk about a tax cut is little more than a gasp of Trumpidian hot air. For Trump’s supporters, of course, this will hardly matter. He’ll tell them a tax cut is coming and then, when it doesn’t arrive, he’ll turn around and blame the Democrats, or the media, or Republicans on Capitol Hill, or whoever might be on his bad side on any given day. All that matters to the President is that he can make this utter baseless promise now and his supporters will eat it up just like they eat up the utter nonsense he spews on a daily basis. The fact that he’s lying hasn’t mattered to them before, so why should it matter now?