October 24, 2018
Politico calls it “the mystery middle-class tax cut.” President Donald Trump first floated the idea on October 20 at a Nevada rally, 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 stop in Texas on October 22, telling White House reporters that the administration plans to produce a “resolution” calling for a 10% tax cut for middle-income earners
It was not clear what he meant by resolution, the political news outlet said, noting that there are no current plans in Congress for any kind of large new tax cut for the middle class. In fact, Politico reported, White House officials, congressional leaders (who already have left town to campaign in their home states), and tax nerds “mostly have no idea what he’s talking about.”
Aides were left to conjecture exactly what the president had read in his 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 told Politico reporters Nancy Cook and Ben White.
The tax cut has been proposed by the POTUS at a time when the GOP already is scurrying to avoid rebukes 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 in six years.
“This is the height of cynicism,” Greg Valliere, chief global strategist for Horizon Investments, told Politico 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: Senator Kamala Harris (D-California) 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.
Research contact: @nancook