President Barack Obama, in an effort to sell a health care plan that made voters, at the very least, uneasy, promised that “if Americans like their doctor, they’ll be keeping their doctor. You like your plan? You’ll be keeping your plan.” He and other Democrats repeated that promise over and over in one form or another. When that proved not to be the case, the Republicans were gleeful, the president was embarrassed (remember when we had presidents who could be embarrassed?) and trust in government took another hit.
Now, President Donald Trump has said many things about his tax plan (many of them false, including the claim we are the highest-taxed nation in the world). On Wednesday, however, he was emphatic on a critical aspect of the GOP effort. He said:
“The rich will not be gaining at all with this plan. We’re not — we’re looking for the middle class, and we’re looking for jobs — jobs, meaning companies. So we’re looking at for the middle class and we’re looking at jobs. ... I think the wealthy will be pretty much where they are, pretty much where they are. We can do that, we’d like it. If they have to go higher, they’ll go higher, frankly. We’re looking at the middle class and we’re looking at jobs. OK?”
The problem is that for every single plan we have seen from the White House or from House Speaker Paul Ryan, R-Wis., that is categorically false.
The Tax Foundation looked at Trump’s campaign tax plan, finding: “The bottom 80 percent of taxpayers (those in the bottom four quintiles) would see an increase in after-tax income between 0.8 percent and 1.9 percent, under both policy assumptions. Taxpayers in the top quintile would see a 4.4 percent increase in after-tax income under the higher-rate assumption, or 8.7 percent under the lower-rate assumption. Those in the top decile would see a 5.4 percent increase in after-tax income under the higher-rate assumption, or 9.3 percent under the lower-rate assumption.” The rich get more.
The Tax Policy Center looked at the “plan” (really a series of bullet points) that Trump outlined in April. It found: “In absolute terms, the average effects range from a tax cut of $40 for the lowest quintile to a tax cut of about $938,000 for the top 0.1 percent of households. After-tax income would rise by 0.3 percent in the bottom quintile and by 13.3 percent for the top 0.1 percent. It is clear that higher-income households would receive a much larger benefit as a share of their income relative to other households.” The rich get more.
When the Center on Budget and Policy Priorities looked at the House’s “Better Way” tax plan, it found: “For the top one-tenth of 1 percent — a group whose average income is $7.5 million — average after-tax income would increase a stunning $1.3 million, an average of 17 percent. Recent Census data show that median household income grew 5.2 percent in 2015, after adjusting for inflation, after years of stagnation. The House GOP tax plan would provide more than triple that percentage increase in after-tax income for this very high-income group.”
In all of these plans, the rich get richer and get disproportionately richer than other income groups. Trump says the rich won’t get anything.
There are a couple of possible ways to reconcile Trump’s language with the plans we have been seeing.
One possibility is that he threw every tax plan we’ve seen to date in the trash and decided to cut out tax cuts for the rich, especially for the pass-through corporations that allow those with tax professionals’ help to incorporate and get the lower 15 percent — or whatever it turns out to be — corporate tax rate. That, plus revenue neutrality, is what the Democrats want. They’ll be thrilled. The Republicans will have a meltdown. That will be the end of tax reform, and probably Trump’s last chance to accomplish something beyond filling a Supreme Court vacancy. We should not discount this possibility insofar as Trump has fallen in love with “dealmaking” — capitulating entirely, that is - with the Democrats. Caring nothing about substance, he is delighted to sell out the GOP, get media praise (no more “lying press”) and chalk up another “win.”
The other possibility is that Trump is lying — you know, just as he has done 1,145 times since entering office. There is a strong clue that Trump is not only unserious about selling a tax bill that doesn’t help the rich, but also that he has no real tax bill at all to sell. According to the New York Times, “Republicans remain divided on key details” and Trump is “promoting quick passage of a new tax code that has yet to be written.”
Oh, I see. Whether this is Trump melting like butter when exposed to the sunny smiles of “Chuck and Nancy” or just telling another lie is anyone’s guess.