7 Smart Takes on Trump’s Tax Speech

7 Smart Takes on Trump’s Tax Speech

iStockphoto/The Fiscal Times

Middle-Class Tax Cuts Won’t Be Cheap or Easy: "The third principle outlined by the President – lowering taxes for middle-class families – is probably the most challenging one. This is because providing tax relief is expensive, leading to lower revenue for the federal government. Meanwhile, Republicans are trying to pass a tax bill through the reconciliation process, which prohibits legislation from increasing the federal deficit in the long run. Trying to pass a large middle-class tax cut alongside a tax reform package could make the legislative math very difficult." – Scott Greenberg, Tax Foundation 

This Was Not an Effective Sales Pitch: “So, it looks as if the upper-middle class from the Northeast and West Coast (who use mortgage and state-and-local-tax deductions) will pay for most of a corporate and estate tax cut, with impact on truly middle-class folks unclear. … Yesterday, Trump devoted one full paragraph to cutting personal taxes, and parts of a few others. This speech was about corporate taxes, with all else an afterthought. So is the ‘reform.’” – Tim Mullaney, MarketWatch 

Who Will Benefit From a Corporate Tax Cut: “The official Joint Committee on Taxation, as well as the Treasury Department and the independent Tax Policy Center, all say shareholders bear roughly three-quarters of the burden of the corporate tax, and therefore would be the main winners were it cut. The administration rejects those studies, pointing to other analyses showing workers bearing the brunt of the tax. … But his plan could actually raise taxes for some low-income people, though, because he wants to end the head-of-household filing status that benefits single parents.” – Brian Faler, Politico

What Voters Really Want: “In a Gallup poll from April, six in 10 Americans overall said upper-income earners pay too little in taxes. They've said the same thing in Gallup surveys going back a quarter-century as income inequality has widened in the U.S. economy. The blue-collar white voters in Trump's base feel the same way – even more strongly.” – John Harwood, CNBC 

What About the Deficit? “In laying out what he called his principles for a tax overhaul, Mr. Trump made no mention of insisting that cuts be offset by corresponding increases to avoid adding to the deficit, essentially acknowledging publicly what his aides have privately for weeks: that he is willing to accept a plan that adds to the deficit, which had long been considered anathema to many conservative Republicans.” – Julie Hirschfeld Davis and Binyamin Appelbaum, New York Times 

Trump Didn’t Make Republicans’ Job Any Easier: “[B]y embracing a 15 percent tax rate for pass-through businesses (with no accompanying anti-abuse rules), a new child care subsidy, and a special low rate for unrepatriated foreign income Trump seemed to be endorsing three new provisions that could meet the definition of special interest loopholes. … It will be especially difficult for [congressional Republicans] to close specific ‘special interest loopholes’ without backing from Trump or Hill Democrats.” – Howard Gleckman, Tax Policy Center 

Tax Reform Could End Up Like Obamacare Repeal: “I'm ready to go on record and predict that there will be no tax reform law, just as there was no new health care law. Trump will make the same mistakes he made last time -- and so will the Republican majority in the Senate.” – Joe Nocera, BloombergView