Trump, GOP play defense in middle-class tax cut pitch

Trump, GOP play defense in middle-class tax cut pitch
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The Trump administration is pushing back against criticism from Democrats that its tax-reform plan will be a boon for the rich, casting the GOP bid to slash corporate taxes as a win for workers.

The White House has reason to worry that arguments made by Democrats and other critics are resonating. A CBS News poll released Sunday found 58 percent believe Republicans’ tax proposals would favor the wealthy, with just 18 percent saying it would favor the middle class. 

President Trump emphasized the middle class in comments on the tax effort on Monday. 

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“We want to make sure that the middle class is the biggest beneficiary of the tax cuts and tax reform,” Trump said in remarks to reporters.

He also said his efforts are focused at the middle class in a speech last week in Pennsylvania. 

“It's a middle-class bill. That's what we're thinking of. That's what I want,” Trump said, adding that wealthy people have told him that they want the tax plan to focus on middle-income families rather than themselves.

Trump’s Council of Economic Advisers on Monday released a paper arguing that the GOP plan to slash the corporate tax rate would increase average household income by $4,000 to $9,000 annually. Some outside experts were skeptical of the claim.

After the failure to repeal ObamaCare, the stakes are high for Republicans to deliver on their tax-reform promises, with some in the party suggesting the GOP could lose one or both houses of Congress in the midterm elections next year if they fail.

Trump and Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellSunk judicial pick spills over into Supreme Court fight Hillicon Valley: Trump's Russia moves demoralize his team | Congress drops effort to block ZTE deal | Rosenstein warns of foreign influence threat | AT&T's latest 5G plans On The Money: Trump 'ready' for tariffs on all 0B in Chinese goods | Trump digs in on Fed criticism | Lawmakers drop plans to challenge Trump ZTE deal MORE (R-Ky.) said they’d like a tax bill passed this year, though they noted that previous administrations took more than one year to pass major pieces of legislation.

Democrats have long criticized Republican tax cut efforts as a windfall for the wealthy, and their attacks have increased in recent weeks. Their arguments have been backed up by at least one nonpartisan think tank, which garnered big media attention. 

Democrats point to elements of the GOP plan that tend to benefit the rich, such as repeal of the estate tax and lowering of the top rate for “pass-through” businesses.

Complicating matters for the White House is that at times, key players have made comments that stray from that message. 

Treasury Secretary Steven MnuchinSteven Terner MnuchinGOP tax writer introduces bill to reduce capital gains taxes Dem lawmaker calls for cryptocurrency probe after Mueller indictments Meet the woman who is Trump's new emissary to Capitol Hill MORE acknowledged last week that Trump’s plan to repeal the estate tax would largely benefit the wealthy.

And Trump himself has said that everyone would benefit from the tax plan if the economy improves.

But by and large, the Trump administration has been trying to stay on message and explain how their efforts would benefit typical households.

“There’s no question about it that the White House knows exactly what message obstacles they have to overcome,” said GOP strategist Ford O’Connell.

For the White House to get legislation enacted, they “have to short-circuit the claim that this benefits the rich and is a handout to big business,” he said.

Other top Republicans are aware of the perception.

Speaker Paul RyanPaul Davis RyanInterior fast tracks study of drilling's Arctic impact: report Dems unveil slate of measures to ratchet up pressure on Russia National Dems make play in Ohio special election MORE (R-Wis.) pushed back against the argument in a speech last week at the Heritage Foundation, saying that the current tax code actually disproportionately benefits the wealthy because “it works best for those who know how to take advantage of all the breaks and deductions.”

But proponents of a tax overhaul say it’s particularly valuable for the White House to make the case that the middle class would benefit.

“The single biggest megaphone is at the White House,” said Douglas Holtz-Eakin, president of the American Action Forum and a former Council of Economic Advisers chief economist during the George W. Bush administration.   

The top Democrat in the Senate, Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerData confirm that marijuana decriminalization is long overdue Pollster: Kavanaugh will get Dem votes Democrats slam Trump for considering Putin’s ’absurd’ request to question Americans MORE (D-N.Y.) slammed the White House’s report on corporate tax cuts, saying it was based on “fake math.”

GOP backers of a tax code rewrite said the report helps them.

“You have to have a White House that’s engaged in the issue and is able to show with facts and figures that no, this is actually going to help the middle class,” said Jon McHenry, vice president at North Star Opinion Research, a Republican polling firm.

Dean Zerbe, national managing director of alliantgroup and a former Senate Finance Committee aide, said that the Council of Economic Advisers report “fortifies” the GOP’s base and gives supporters affirmative points that they can make.

“Win or lose, I think this debate over tax reform is going to be decided by the middle class and everyday Americans,” Brandon Arnold, executive vice president of the National Taxpayers Union, said.

Looming over the tax debate is next year’s midterm elections.

Democrats are targeting dozens of House seats held by Republicans, including districts that Hillary ClintonHillary Diane Rodham ClintonBernie Sanders: Trump 'so tough' on child separations but not on Putin Anti-Trump protests outside White House continue into fifth night Opera singers perform outside White House during fourth day of protests MORE won in 2016. And Republicans are hoping to defeat many of the 10 Democratic senators who are up for reelection in states that Trump carried. 

The middle-class messaging could also pressure vulnerable Democratic senators, such as Joe ManchinJoseph (Joe) ManchinPollster: Kavanaugh will get Dem votes Overnight Health Care: Trump officials explore importing prescription drugs | Key ObamaCare, drug pricing regs under review | GOP looks to blunt attacks on rising premiums | Merck to lower some drug prices Dems pressure GOP to take legal action supporting pre-existing conditions MORE (W.Va.) and Heidi HeitkampMary (Heidi) Kathryn HeitkampPolling analyst: Same Dems who voted for Gorsuch will vote for Kavanaugh Dems pressure GOP to take legal action supporting pre-existing conditions Election Countdown: Senate, House Dems build cash advantage | 2020 Dems slam Trump over Putin presser | Trump has M in war chest | Republican blasts parents for donating to rival | Ocasio-Cortez, Sanders to campaign in Kansas MORE (N.D.), to back a GOP tax bill, McHenry said.

The White House needs to “make the case in a way that the Joe Manchins and Heidi Heitkamps of the world can support the plan,” he said.