The White House is sharply criticizing plans by top advisers to former President Donald Trump to sharply cut taxes on U.S. companies, setting the stage for a traditional conflict over economic policy during the 2024 presidential election.
Some Trump advisors, according to plans discussed in a Washington Post report on Monday, wants to push forward the tax cuts for the wealthy and corporations that Republicans passed during Trump’s first term, potentially cutting the corporate tax rate from 21% to 15%. Before the 2017 tax law was passed, the tax rate was 35%, and President Joe Biden has proposed increasing it to 28%.
Trump advisers hope to pay for the tax cuts with a massive 10% tariff on all imports into the United States, which would dramatically raise prices for a wide range of goods imported from around the world for middle- and working-class Americans. It could also trigger a global trade war.
While Republicans, including Trump, continue to brag about their supposed focus on the American working class, the key domestic policy achievement of the last two Republican presidencies has been a deeply regressive tax cut focused on corporations and the wealthiest Americans. Trump’s plan, which would likely face opposition from both Democrats and Republicans in Congress, would mean the party continues to view tax cuts as its main policy goal.
“Another wave of deficit-increasing tax breaks for big corporations — especially one directly tied to unprecedented price increases for American families — would turn back the clock and refocus on trickle-down economics that hollowed out the American middle class and added trillions to the national debt “has increased,” said White House spokesman Andrew Bates. “Trump’s failed tax break to wealthy special interests in 2017 drove up our deficits and failed to help working families achieve higher growth, more jobs or higher wages. And unlike President Biden’s policies that revitalize American manufacturing, they have done next to nothing to help America capture the manufacturing industries of the future.”
The plans discussed by Trump advisers are not yet final and could change. “Trump has not yet committed to specific tax cut numbers for his second term and his focus will be on how best to help American workers,” Trump campaign spokesman Jason Miller told the Post. “Stay tuned.”
Among the proposals discussed in the Post report is using money collected by the tariff to send Americans a dividend check, which would theoretically reduce the impact on lower-income workers.
Democrats appeared eager Monday to revive a traditional fight over economic policy. President Barack Obama won re-election in 2012 thanks in large part to his successful attacks on then-Republican presidential candidate Mitt Romney’s tax cut proposals. that targeted the wealthiest Americans.
“Donald Trump plans to revive the failed trickle-down policies of his first term that lined the pockets of his ultra-rich friends and incentivized companies to move American jobs overseas,” Biden campaign spokesman Ammar Moussa said. “This is the story of the Trump economy – running up the deficit to benefit his wealthy friends at the expense of hard-working Americans and their families.”
Cutting the corporate tax would be politically unpopular: 61% of Americans said in a survey earlier this year that they were “very” annoyed that corporations were not paying their fair share of taxes Pew Research Center. Two-thirds of Americans surveyed in the poll thought taxes on corporations should be increased, including 45% of Republicans.
And no matter what Trump and his advisers come up with, putting his plans into action could prove difficult. Many Republicans in Congress, particularly in the Senate, remain loyal to Republicans’ historically orthodox support for free trade. And it’s unclear whether the business community, which lobbied hard for the 2017 tax cut, would be as interested in a second round of cuts as it is in continuity.
Both Trump and Biden have promised it turn at least part of the prevailing economic policy agenda on its head For the past 40 years, this has been a time dominated by free trade and the belief that higher-income tax cuts would “trickle down” to typical Americans. Biden’s plan, which he had difficulty selling to the publicfocuses on using government subsidies to revitalize American manufacturing while increasing the power of the American working class to negotiate wage increases.