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

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

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. 

ADVERTISEMENT

“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 McConnellFeehery: Pivoting to infrastructure could help heal post-impeachment wounds McConnell urges Trump to voice support for Hong Kong protesters Key GOP senator: 'We need a breakthrough' on spending talks 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 MnuchinOn The Money: Supreme Court temporarily blocks House subpoena of Trump financial records | Trump touts 'cordial' meeting with Fed chief | Stopgap funding measure includes census money, military pay raise McConnell backs 'clean' stopgap spending bill through Dec. 20 The Hill's 12:30 Report — Presented by Johnson & Johnson — Trump floats testifying in impeachment hearing 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 RyanSaagar Enjeti: Crenshaw's conservatism will doom future of GOP Retirees should say 'no thanks' to Romney's Social Security plan California Governor Newsom and family dress as 2020 Democrats for Halloween 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 SchumerSenate Democrats unveil priorities for federal privacy bill Overnight Health Care: Trump officials making changes to drug pricing proposal | House panel advances flavored e-cig ban | Senators press FDA tobacco chief on vaping ban Chad Wolf becomes acting DHS secretary 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 ClintonThe Memo: Centrists change tone of Democratic race In 2020, democracy will be decided at the margins Michelle Obama presents Lin-Manuel Miranda with National Portrait Award 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) ManchinPolitical purity tests are for losers Former coal exec Don Blankenship launches third-party presidential bid Centrist Democrats seize on state election wins to rail against Warren's agenda MORE (W.Va.) and Heidi HeitkampMary (Heidi) Kathryn HeitkampThe Hill's Morning Report — Biden steadies in third debate as top tier remains the same Trump wins 60 percent approval in rural areas of key states Pence to push new NAFTA deal in visit to Iowa 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.