With one eye on the upcoming election and the other on a decelerating economy, President Trump is pushing administration officials and Republican lawmakers to come up with a new package of tax cuts, according to a report in Thursday’s Washington Post.
White House National Economic Council Director Larry Kudlow is reportedly leading the effort, which is still in the preliminary stages and is expected to include a variety of proposals aimed at boosting the economy.
“The early-stage discussions reflect Trump’s desire to refocus the economic narrative amid some signs of a slowing economy, and after the major Republican tax cut package of 2017 failed to produce enduring economic benefits or political gains for the GOP,” said the Post’s Erica Werner, Josh Dawsey and Jeff Stein.
Rep. Kevin Brady (R-TX), one of the architects of the Tax Cuts and Jobs Act, told the Post that he’s focused on new tax cuts for the middle class and hopes to make permanent some of the 2017 tax law’s temporary provisions.
A political message: Although there’s a growing consensus that the GOP tax cuts have been something of a bust in terms of economic growth and wage gains, Republicans want to emphasize their role as dedicated tax cutters, the Post said, in contrast to Democratic candidates who are proposing substantial tax hikes, especially on corporations and the wealthy. “I expect a Republican agenda on growth for the 2020 election,” Brady said.
No word on offsetting costs: Many of the individual provisions in the 2017 tax cut are scheduled to expire in 2026, and Republicans have been expected to push to make them permanent. Doing so, however, would cost billions more in lost revenue, above and beyond the $1.9 trillion over 10 years lost by the 2017 legislation. New middle-class tax cuts would only add to that tally.
We’ve heard this before: In the runup to the 2018 congressional elections, President Trump talked about a 10% percent tax cut for the middle class, though little was heard about that proposal once the voting was over. More recently, White House officials have discussed a possible new round of tax cuts for 2020. "We’ll be looking at tax cuts 2.0, something that will be something we’ll consider next year,” Treasury Secretary Steven Mnuchin said in September.
Don’t expect legislation before the election: Democrats are unlikely to take up new tax cuts in the House, and some dismiss the idea as mere political posturing intended to help a president facing an increasingly difficult political environment. “I would expect this would just be another distraction from the fact that he’s about to be impeached,” said Rep. Lloyd Doggett (D-TX), who sits on the Ways and Means Committee.