The Daily 202: Trump’s plutocracy problem complicates push for tax cuts
THE BIG IDEA: Two in three Americans believe that large corporations pay too little in taxes. Only 11 percent of U.S. adults think these businesses pay too much, while 17 percent think they pay their fair share. Even half of Republicans believe big businesses pay too little in taxes, according to a new Washington Post-ABC News poll.
Overwhelmingly, across party lines, people feel that the current tax system is rigged in favor of the wealthy. Over 7 in 10 Americans think the tax system favors the rich. Just five percent think the current code favors the middle class.
But the more details that leak out about President Trump’s plan, the clearer it becomes that the wealthiest are likely to be the biggest beneficiaries. Top White House negotiators and key GOP leaders have reportedly agreed on two targets: lowering the corporate tax rate from 35 percent to 20 percent and cutting the top income tax rate — for those who make more than $418,000 a year — from 39.6 percent to 35 percent.
— Trump is scheduled to fly to Indiana tomorrow to unveil details of the proposal after months of behind-the-scenes negotiations. It’s unclear how specific he will be, and people involved in the process say that much remains fluid, but White House aides insist that selling these cuts will be the president’s top priority in the coming months.
— The new Post-ABC poll shows that Trump is starting in a hole. Before our pollsters asked about any specifics, respondents were asked generally to react to Trump’s tax plan “given what you’ve heard or read”: 28 percent support it, and 44 percent oppose it. The rest — 34 percent — have no opinion yet.
A majority of the country, 51 percent, thinks Trump’s plan will mainly help the wealthy. Just 10 percent think it will mainly help the middle class. A quarter of the country thinks the Trump tax plan will help both groups equally, and the rest are undecided.
There is also intensity against Trump: 15 percent said they support Trump’s plan strongly while 33 oppose it strongly. Only 60 percent of Republicans support the plan right now. Overall, 35 percent of all men support Trump on taxes but just 22 percent of women do.
When asked specifically whether income taxes paid by businesses should be reduced, the country is split about evenly: 45 percent support and 48 percent oppose corporate tax cuts.
— The poll makes clear that the administration will win the tax fight if it can successfully represent the plan as primarily about cutting taxes for middle- and lower- income people. In the survey, 78 percent support such cuts — including majorities in both parties. Just 19 percent oppose reducing income taxes paid by middle- and lower-income people.
Our Damian Paletta reports that Republican leaders, aware the current draft of the plan could be construed as a huge giveaway to the wealthy, are still trying to design some features to the package that would ensure that the rich don’t get too large a share of the benefits: “As it stands, the tax cut is expected to add at least $1 trillion to the debt, and potentially much more. … Republicans plan to push for collapsing the seven income tax rates to three new brackets … External estimates, based on initial reports of the plan and not full details, found that it would cut taxes by $5.5 trillion over 10 years.”
— Trump also understands the optics. Instead of tinkering with the substance, he has flatly insisted that his plan will not benefit the rich. “The people I care most about are the middle-income people in this country who have gotten screwed,” the president insisted this summer.
Speaking to reporters at the White House two weeks ago, Trump insisted that the proposal is “not a plan for the rich” and might even raise their taxes. “I think the wealthy will be pretty much where they are,” he said. “If they have to go higher, they’ll go higher.”
But most tax experts agree the rich, in fact, are likely to benefit bigly. In March, based on a preliminary framework released by the Treasury Department, the nonpartisan Tax Policy Center estimated that half of all the benefits from Trump’s plan would go to the richest 1 percent. The study found that the richest 1 percent would receive — on average — a $175,000 tax cut. Moderate-income households would save only $760.
— This is part of a pattern: Trump campaigns like a populist. He governs like a plutocrat. The dichotomy between what the president promises his tax plan will do and what’s he’s likely to unveil on Wednesday is just the latest example of the president’s actions not backing up his rhetoric.
As a candidate, Trump said hedge fund managers weren’t supporting his campaign because they were “getting away with murder” when it came to avoiding taxes. He said he would stop them and argued during the debates that he was well suited to close loopholes in the tax code because he had taken advantage of them.
Then, as president-elect, he was caught on a cellphone camera reassuring patrons at one of Manhattan’s poshest restaurants. “We’ll get your taxes down, don’t worry about it,” he said at the 21 Club.
— With the Trump administration, always watch what they do — not what they say. After Steven Mnuchin was named treasury secretary, he made a very specific declaration on CNBC that rattled the markets: “Any reductions we have in upper income taxes will be offset by less deductions, so that there will be no … absolute tax cut for the upper class.”
Jake Tapper asked him about this Sunday on CNN, and Mnuchin walked it back. “I did say that,” he said. “I just want to clarify. It was never a promise. It was never a pledge.”
— One of official Washington’s favorite parlor games over the past few days has been speculating about what exactly Trump is trying to distract people from by launching a culture war against the NFL over the national anthem. Is he trying to get us to pay less attention to the fact that his favored candidate is probably going to lose today in Alabama? Is he trying to divert us from the impending failure of the Cassidy-Graham health-care bill that he pushed hard for last week? Or the worsening humanitarian crisis and the botched federal response to Hurricane Maria in Puerto Rico? Could it be the hypocrisy of Jared Kushner using personal email for official government business at the same time his father-in-law attacked Hillary Clinton for doing the same thing?
Maybe, though, Trump wants limited media scrutiny of the specifics of his tax plan. Perhaps he does not want his core supporters to feel like they’ve been had? Folks in the Rust Belt and Sun Belt have repeatedly proved willing to vote against their economic self-interest when they are focused on cultural concerns, whether opposing gay rights to supporting gun rights. Maybe that’s what going after Colin Kaepernick is really about.
— One of the biggest challenges for D.C. Republicans right now is that they lack credible messengers to persuade people that their tax plan is not a sop to the wealthiest 1 percent. Their argument is that cutting taxes on rich individuals and big businesses will boost economic growth, prevent companies from relocating overseas and eventually trickle down into higher wages for workers.
Trump’s approval rating is 39 percent, with 57 percent disapproval. This makes it hard to scare Democratic senators from red states into backing him up. As the first president since Richard Nixon to refuse to release his tax returns, we don’t have any idea how much the self-proclaimed billionaire will personally benefit from his own plan. Trump has also given no indication that he has the self-discipline to make a sustained or substantive case for massive corporate tax cuts.
Paul Ryan’s approval rating is 31 percent nationally. Among Republicans, just 53 percent think the Speaker of the House is doing a good job. We didn’t ask about Mitch McConnell in our latest poll, but other surveys have shown that the Senate majority leader’s image is even more underwater among rank-and-file Republicans than Ryan’s. Both are members of the “Big Six” that negotiated this tax plan in secret over the past several months. Outside of the GOP donor community, very few people know the two other lawmakers: House Ways and Means Committee chairman Kevin Brady and Senate Finance Chairman Orrin Hatch.
Mnuchin, who wants to be the biggest cheerleader for the plan, is poorly positioned on the issue. The former Goldman Sachs banker, whose net worth is somewhere around $300 million, was badly compromised by the revelation that he requested a military jet to travel to Europe for his honeymoon.
The treasury secretary did take a government aircraft to Kentucky last month on a trip that was nominally about promoting the Trump tax plan. He also viewed the solar eclipse from the top of Fort Knox, which was very near the path of totality. Facing scrutiny, Mnuchin made matters worse by pretending he wasn’t really that into it. “People in Kentucky took this stuff very seriously,” he said dismissively. “Being a New Yorker, I don’t have any interest in watching the eclipse.”
Mnuchin’s wife, the actress Louise Linton, drew comparisons to Marie Antoinette in recent weeks. Joining him at Fort Knox, the nation’s repository of gold, she posted an Instagram photo of herself deplaning and tagged designers like Hermes and Valentino that most Americans cannot afford to buy from. She then attacked an online user who was offended that taxpayers paid for the junket. Linton later apologized — but she did so while wearing a designer ball gown on the cover of Washington Life magazine.
— Another reason it’s hard for the administration to make the case: Neither history nor the smartest experts are on their side. “Without major changes, this deal is looking more and more like traditional ‘supply side economics,’ the theory that tax cuts for the top help everyone else, because the wealthy supposedly turn around and spend and invest more,” Heather Long explained in an analysis published yesterday afternoon on Wonkblog. “After decades of stagnating wages (especially for men) and rising inequality, Americans are growing skeptical of this approach. It didn’t work in Kansas, and most economists predict few economic gains from this latest attempt. … Goldman Sachs put out a report last week saying the tax plan would only add 0.1 percent to 0.2 percent to America’s economy in 2018 and 2019, far less than the extra point of growth the White House has been predicting. The National Association for Business Economics, a group that tends to lean to the right, has a similar prediction: Only 0.25 percent extra growth in 2018 from Trump’s tax package …
“Just about everyone agree something needs to be done to stop U.S. companies from going relocating overseas to lower their tax bills,” Heather adds. “But it’s questionable whether slashing corporate tax rates will actually spur companies to use the extra cash on hand to pay workers more. That didn’t happen after the 1986 tax revision under President Ronald Reagan. Weekly wages for rank and file types (non-managers) barely budged in the years that followed, according to data from the Labor Department.”
WHILE YOU WERE SLEEPING:
THE EMAIL SAGA CONTINUES …
— One day after news surfaced that Jared Kushner used a private email account to sporadically conduct White House business, the New York Times reports that at least six of Trump’s closest advisers have done the same. Matt Apuzzo and Maggie Haberman write: “Stephen K. Bannon, the former chief White House strategist, and Reince Priebus, the former chief of staff, also occasionally used private email addresses. Other advisers, including Gary D. Cohn and Stephen Miller, sent or received at least a few emails on personal accounts, officials said. Ivanka Trump, the president’s elder daughter, who is married to Mr. Kushner, used a private account when she acted as an unpaid adviser in the first months of the administration, Newsweek reported Monday. Administration officials acknowledged that she also occasionally did so when she formally became a White House adviser. …
“While the private email accounts spurred accusations of hypocrisy from Democrats, there are differences. Mrs. Clinton stored classified information on a private server, and she exclusively used a private account for her government work, sending or receiving tens of thousands of emails. The content and frequency of the Trump advisers’ emails remain unknown, but Trump administration officials described the use of personal accounts as sporadic.” The private email addresses have the potential to complicate special counsel Robert Mueller’s search for documents related to his Russia investigation.
— House Oversight Chairman Trey Gowdy (R-S.C.) joined Democrats Monday in demanding details on any senior Trump officials who have used private emails. Mike DeBonis reports: “The letters, [sent] to White House counsel Don McGahn and the leaders of two dozen federal departments and agencies, demand answers to inquiries about the use of nonofficial email and other messaging accounts[.] … Rep. Elijah E. Cummings (D-Md.), the ranking Democrat on the panel, also joined the request. The letters represent some of the most aggressive oversight of the Trump administration from Gowdy, who took over the reins of the Oversight Committee in June … [and] come after the Republicans on the committee repeatedly questioned [Hillary] Clinton’s use of private email … during her tenure as secretary of state.”
Jared Kushner destroyed the Rose Law firm billing records and fired the White House travel office staff.
— Matthew Miller (@matthewamiller) September 24, 2017
A few emails on your personal account is really no big deal, but after the campaign they ran, it’s quite the combo of arrogance & stupidity.
— Matthew Miller (@matthewamiller) September 24, 2017
It will be more than 6. This just in: everyone in govt has done this, the GOP campaign was completely disingenuous, & too many fell for it. https://t.co/4deOfi2zRE
— Matthew Miller (@matthewamiller) September 26, 2017
GET SMART FAST:
- Anthony Weiner was sentenced Monday to 21 months in prison after pleading guilty to transferring obscene material to a minor. The penalty marks a stunning downfall for Weiner, a former congressman and one-time leading voice for Democrats whose career was repeatedly derailed by his propensity for sending lewd photos. (Matt Zapotosky)
- Three Israelis – a police officer and two security guards – died after a Palestinian opened fire at the entrance to a settlement near Jerusalem. The attacker was also killed, and a fourth victim was rushed to the hospital. (Ruth Eglash and Loveday Morris)
- The Trump administration is under pressure to ramp up its recovery efforts in Puerto Rico. The island continues to face major logistical challenges in getting essential supplies to residents impacted by Hurricane Maria. (Joel Achenbach, Dan Lamothe and Alex Horton)
- Violent crime and murders in the United States increased for a second consecutive year in 2016, according to new FBI data — a 4.1 percent spike that appears to have been partially driven by an uptick in killings in some major cities. (Mark Berman)
- Nearly 17,000 registered voters in Wisconsin were kept from the polls in 2016 because of the state’s strict voter ID law, according to a new study from the University of Wisconsin. The findings are sure to fuel an already heated debate over Trump’s narrow victory in the state. (New York Times)
- Republican senators unveiled a new proposal to allow “dreamers” a pathway to legalization, but the measure bars the young undocumented immigrants from sponsoring family members. That language ensures more support from conservative than previous ones but it is already getting pushback from immigration advocates. (Politico)
- The Homeland Security Department intends to collect the social media information of all immigrants – including naturalized citizens and permanent residents. DHS published a new rule in the Federal Register last week in which it stated it would include by Oct. 18 in people’s immigration files “social media handles, aliases, associated identifiable information, and search results.” (Buzzfeed News)
- More than 430,000 Rohingya have fled from Burma to neighboring Bangladesh in the past month, seeking escape from a “textbook example of ethnic cleansing” led by the Burmese military. Reporting from Balukhali just four weeks after the violence began, Max Bearak has a must-read story on the plight of the Rohingyan refugees, who have made the most rapid exodus from any country since the 1994 Rwandan genocide.
- Equifax is facing heightened scrutiny after a massive data breach exposed the personal information of 143 million Americans — prompting questions over whether one of the world’s largest data providers can effectively protect its enormous trove of consumer information. (Renae Merle)
- Former Rhode Island Gov. Lincoln Chafee said he is considering challenging his successor Gina Raimondo in 2018. And while he has not officially decided whether to run, Chafee — who has previously governed as a Republican and an independent — said he would enter the race as a Democrat. (WPRI 12)
- Joe Biden has launched a daily podcast called “Biden’s Briefing,” in which the former vice president will highlight his favorite news articles. Topics will range from health care to climate change to the economy. (CNNMoney)
- Megyn Kelly’s new morning show premiered this week on NBC to very mixed reviews. Post television critic Hank Stuever memorably quipped that the first episode was like watching a network “assemble its own Bride of Frankenstein,” using “parts of Ellen DeGeneres, Kelly Ripa and whatever else it can find.” (Read his full review here.)
- The New Jersey killer who duped William F. Buckley into campaigning for his release, only to confess to the crime years later, has died in a California prison hospital, officials said Sunday. He was 83. (AP)
- The man who insisted the apocalypse would fall this year on Sept. 23 has begun peddling a new biblical “doomsday date” — Oct. 15. “Hold on and watch — wait until the middle of October and I don’t believe you’ll be disappointed,” he wrote on his website, before going on to promote his book. “You don’t have long to read it,” he added. (Kristine Phillips)
REPUBLICANS FAIL ON HEALTH CARE — AGAIN:
— Susan Collins became the third Republican senator to announce opposition to the Cassidy-Graham bill — effectively killing the last-ditch attempt to roll back Obamacare. Sean Sullivan, Juliet Eilperin and Kelsey Snell report: “Collins [R-Maine] announced that she could not back the measure … moments after the release of a much-anticipated Congressional Budget Office analysis that forecast ‘millions’ of Americans would lose coverage by 2026 if the bill was enacted. Two GOP senators — Rand Paul (Ky.) and John McCain (Ariz.) — had already come out against the bill and were not swayed by a new draft that emerged Monday morning. … A fourth Republican, Sen. Ted Cruz (Tex.), indicated through his aides Monday that he could not back the bill in its current form because it would not go far enough in repealing the 2010 law.
“Senate Majority Whip John Cornyn (R-Tex.) did not rule out the possibility of holding a vote on the proposal despite clear signs that it did not have sufficient support to pass. … Speaking on the Senate floor Monday, McConnell thanked Sens. Bill Cassidy (R-La.) and Lindsey O. Graham (R-S.C.), the bill’s authors, but suggested that their work had stalled out.”
— The CBO reported the legislation would result in a loss of $1 trillion in Medicaid spending by 2026 and reduce the federal deficit by at least $133 billion. (Amy Goldstein)
— Paul Kane writes in his latest column that Cassidy-Graham was “bad news, start to finish, with little chance of success — and little in the way of true legislative scrutiny. … [T]he Senate has barely followed anything resembling a normal process as it considers a bill that would overhaul an industry that represents one-sixth of the national economy. At least partly as a result of that, the [legislation] was left for dead before the Finance Committee hearing had even ended. … The process of making legislative sausage on Capitol Hill has never been pretty, but the effort to repeal the ACA has stretched the limits of congressional norms — and given lawmakers hesitant to support the controversial GOP health-care proposal an excuse to back away.”
— The bill had a dramatic demise, as hundreds of protesters lined up for the only public hearing on the legislation to defend Obamacare. David Weigel reports: “As they filled the halls, senators’ social media teams shared videos of them talking about their personal coverage or even getting arrested; Sen. Ron Wyden (Ore.), the [Senate Finance] committee’s ranking Democrat, personally delivered pizzas to the people who had been lining up since early morning.”
— U.S. Capitol Police reported that more than 180 protesters were arrested as a result of the demonstrations. (Martin Weil)
— The show must go on: in the form of a CNN debate between Cassidy and his partner in the legislative push, Sen. Lindsey Graham (R-S.C.), and Sens. Amy Klobuchar (D-Minn.) and Bernie Sanders (I-Vt.). But the faceoff focused more on the future.
David Weigel reports: “The four senators represented three approaches, with Klobuchar — one of 31 Senate Democrats who declined to co-sponsor Sanders’s [single-payer] health-care bill — arguing for a return to bipartisanship. … Klobuchar and Sanders stayed united to rip apart Cassidy-Graham, quoting from Congressional Budget Office studies and medical industry statements to portray the Republican bill as radical and unworkable. … Cassidy and Graham, both of whom had defended their bill in the Senate Finance Committee, stuck to their workshopped arguments.”
— BUT, BUT, BUT: Senate Republicans are already looking at ways to keep the health-care push alive by keeping open a special budget process that allows them to consider legislation on a party-line vote. Politico’s Seung Min Kim, Jennifer Haberkorn and Burgess Everett report: “Republicans could provide reconciliation instructions for both health care and tax reform in the fiscal 2018 budget resolution that Congress must pass to again unlock the fast-track procedural powers. That might entail some procedural hurdles, but one GOP aide said Monday that because the Finance Committee has jurisdiction over about 95 percent of health care policy, ‘it’s not like we couldn’t slip it in anyway.’
“Alternatively, Republicans could reserve the fiscal 2018 budget for tax reform as planned, but then take up a budget for fiscal 2019 early next year and write reconciliation instructions that addresses Obamacare repeal in that resolution, according to GOP sources. Doing so would put the contentious issue of health care back in the spotlight during the 2018 midterm elections. … McConnell is skeptical of the plan to combine Obamacare repeal and tax reform in next year’s budget[.]”
— The GOP health-care push is indicative of a trend in Trump’s world: Blue states would get hit hard by legislative and executive branch actions while red states would be comparatively spared. John Wagner reports: “Fourteen of the 15 states that would benefit [from Cassidy-Graham] were won by Trump, while 11 of the biggest 15 losers are states he lost. … Blue states would also take a disproportionate hit under a prominent provision in Trump’s tax plan. The vast majority of ‘sanctuary cities’ threatened with loss of federal funding are in Democratic-leaning states … [and the] administration has signaled its intent to significantly scale back mass transit funding traditionally favored by more liberal and urban states. ‘What we’re witnessing is war between the red and the blue,’ said Thomas Mann, a senior fellow at the Brookings Institution. ‘This is hardball, and it’s distinctive from what we’ve seen before.’”
A DIVIDED AMERICA:
— The debate over the national anthem continued on and off the NFL field last night, with the Dallas Cowboys kneeling before the song played prior to their game against Arizona. Des Bieler and Mark Maske report: “[Cowboys owner Jerry] Jones, Coach Jason Garrett and other Cowboys coaches and front office executives locked arms while standing on the field. Before the anthem, Jones and the players and coaches took a knee. They then stood up, with arms still interlocked, for the anthem. Some in the crowd at University of Phoenix Stadium in Glendale, Ariz., where the Cowboys were taking on the host Cardinals, booed at the display. Arizona players also stood and linked arms during the anthem, but they did not take a knee beforehand.”
Trump tweeted again about the issue this morning:
The booing at the NFL football game last night, when the entire Dallas team dropped to its knees, was loudest I have ever heard. Great anger
— Donald J. Trump (@realDonaldTrump) September 26, 2017
But while Dallas dropped to its knees as a team, they all stood up for our National Anthem. Big progress being made-we all love our country!
— Donald J. Trump (@realDonaldTrump) September 26, 2017
— The Post’s new national political reporter Michael Scherer writes that, although Trump made similar attacks on the NFL during his campaign, they never attracted this level of backlash: “Trump attacked an enormously popular sport whose fans prefer it to be a politics-free arena, while once again touching on the raw nerve of race. In so doing, the president proved anew that divisive provocations can mean something completely different when they come not from a private citizen, but the man whose very job description is to lead the country. … Trump’s political strategy appears to be following the logic of other national firestorms he has prompted: take a stand for a position that brings into clear relief the divide between himself and those who he describes as unpatriotic elites. He uses the controversy to dominate the news cycle, position himself as a strong leader and demonstrate that he is fighting for regular working Americans nostalgic for an earlier time in the country’s history.”
— When White House press secretary Sarah Huckabee Sanders was asked by a reporter why the president was devoting so much political oxygen to the NFL, Sanders responded, “Well, that’s determined by you guys.” Callum Borchers writes: “Technically, Sanders is right. Reporters could, in theory, have ignored the subject about which the president of the United States displayed the most interest over the previous three days. That is, of course, a totally unreasonable expectation. You have to hand it to the White House, though: This is a pretty neat trick. Let the president talk for days about demonstrations at NFL games, then claim the protests are the media’s obsession when reporters ask lots of questions.”
— But even a “Fox and Friends” host thought Trump went too far with his remarks. The Daily Beast’s Matt Wilstein reports: “‘When you have Robert Kraft coming out against you, you know you’ve gone too far,’ [host Brian] Kilmeade added, referencing the Trump-supporting New England Patriots owner who denounced the president’s ‘divisive’ comments in a statement on Sunday. ‘He made things immeasurably worse by speaking out,’ he added. ‘And I know what the intention was, but the language used, it was galvanizing in the wrong direction.’ ‘Well, Brian, he is the voice for a lot of people out there,’ co-host Ainsley Earhardt said, jumping in quickly to clean up after Kilmeade. “A lot of people agree with him and are scared to give their opinions.”
— Trump also hit back against a CNN story reporting that his top aide John Kelly was frustrated by the president’s decision to speak out on the issue. CNN’s Kaitlan Collins and Jeff Zeleny report: “In a brief interview Monday evening, Kelly told CNN he is ‘appalled’ by what he sees as a lack of respect for the flag and national anthem. ‘I believe every American, when the national anthem is played, should cover their hearts and think about all the men and women who have been maimed and killed,’ Kelly said. ‘Every American should stand up and think for three lousy minutes.’ His son, Robert Michael Kelly, was killed in combat in Afghanistan in 2010.”
[email protected] is #FakeNews. Just reported COS (John Kelly) was opposed to my stance on NFL players disrespecting FLAG, ANTHEM, COUNTRY. Total lie!
— Donald J. Trump (@realDonaldTrump) September 25, 2017
General John Kelly totally agrees w/ my stance on NFL players and the fact that they should not be disrespecting our FLAG or GREAT COUNTRY!
— Donald J. Trump (@realDonaldTrump) September 25, 2017
NORTH KOREA’S GROWING THREAT:
— North Korea’s foreign minister asserted Monday that Trump’s recent remarks at the U.N. amounted to a “declaration of war,” telling reporters that Pyongyang now has “every right” to shoot down U.S. bombers. Carol Morello reports: “’The whole world should clearly remember it was the U.S. who first declared war on our country,’ [Ri Yong Ho] said. ‘Since the United States declared war on our country, we will have every right to make countermeasures, including the right to shoot down United States strategic bombers even when they are not inside the airspace border of our country.’ Ri’s remarks were the most direct and threatening so far since Trump … threatened to ‘totally destroy’ North Korea [last week].”
Sarah Huckabee Sanders said Monday the United States has not declared war on North Korea, rejecting Ri’s assertion as “absurd.” “’Our goal is still the same,” she [said] … ‘We continue to seek the peaceful denuclearization of the Korean peninsula. That’s our focus, doing that through both the most maximum economic and diplomatic pressures as possible at this point.’”
THE TRAVEL BAN BATTLE: