Advertisement

Trump's tax reform pipedream

One day after visit to Texas, President Donald Trump outlines White House plan for tax reform. Dave Bryan reports.

President Donald Trump's pivot from failed health care repeal to ambitious tax code reform promises to be like jumping from the frying pan into the fire.

The long and futile effort to drive a stake into the heart of Obamacare ultimately was a political misreading of the public's view of the law. While it is flawed, it is seen as better than nothing to more than 20 million enrollees faced with its abandonment.

Advertisement

Similarly, Mr. Trump's new campaign to revamp the tax code with deep tax reductions is viewed among conservatives as a major boost to investment and job growth. But many American working stiffs see it primarily as a rationale for further bailouts for the filthy rich.

Mr. Trump's credibility on tax reform is undercut by his own refusal to reveal his personal income tax returns, which he declined to do throughout his successful 2016 presidential campaign and thereafter.

His recent speech on taxes called for lowering of the top corporate rate from 39.6 percent to 35, and individual rates to three levels of 12, 25 and 35 percent. For single taxpayers taking the standard deduction, the first $12,000 of income would be tax-free, as would the first $24,000 for married couples. Also, middle-income families would receive a higher child tax credit for dependents under age 17.

Now Mr. Trump insists that middle-class taxpayers will be the chief beneficiaries of his new plan, and that neither he himself nor his family members will get anything from it.

"Our framework includes our explicit commitment that tax reform will protect low-income and middle-income households, not the wealthy and well-connected," he said. "They can call me all they want; it's not going to help. I'm doing all I can and it's not good for me, believe me."

One glaring provision, however, is the elimination of the estate tax, long sought by Republicans, which turns out to have affected only an estimated 5,500 American taxpayers last year. Presumably Mr. Trump himself and members of his clan are potentially in that category.

"To protect millions of small businesses and the American farmer," Mr. Trump said, "we are finally ending the crushing, the horrible, the unfair estate tax, or as it is often referred to, the death tax. That means, especially for all of you with small businesses ... you will be able to leave them to your family, and your family won't have to run out and try to do a fire sale and get the money to pay the tax — lose the business, end up going out of business. All those jobs are lost."

He went on, painting an ominous word-picture: "The farmers in particular are affected. They are wonderful farms, but they can't pay the taxes so they have to sell the farm. The people who buy it don't run it with love. They can't run it the same way and so it goes out (of business.) So that death tax is a disaster for this country and for so many small business and farmers. And we're getting rid of it."

  • Commentary:

This sympathetic recitation of the evils of the estate tax was Donald Trump at his salesmanship best, and was well received by his audience at the Indiana Farm Bureau.

But he made no mention of the core question raised in the tax-cut proposals. What will be the fate of the lost revenue to the huge social safety net sewn by the Democrats since New Deal days, and fiercely defended ever since?

Republican assertions that resulting economic growth will more than make up for the cuts are not likely to bring the bipartisan support Mr. Trump has sought lately in his political courtship of the Democratic congressional leadership.

Mr. Trump's switch from health care reform to tax reform only invites a return to the longtime partisan dispute over the basic role of the federal government in social welfare policy. Each side will cling to the same ideological divide that drove the two parties over Obamacare, with continued stalemate in store.

Jules Witcover is a syndicated columnist and former long-time writer for The Baltimore Sun. His latest book is "The American Vice Presidency: From Irrelevance to Power" (Smithsonian Books). His email is juleswitcover@comcast.net.

Advertisement
Advertisement