This afternoon in Indianpolis, Pr*sident Donald Trump will deliver a speech outlining a long-awaited tax overhaul that, among other things, the White House and Republicans in general hope will reboot a regime that has failed to deliver on promises to its base and whose various shenanigans, gaffes, and missteps have generated a backlash that includes ever-lower approval ratings and eight Democratic election wins this year in Republican-controlled state legislative districts. Those wins suggest strong potential for a blowout Republican loss in the 2018 midterm elections that are just over 13 months away.
Whether the tax plan—called the “Unified Framework”—will help the GOP dig itself out of the hole it has created for itself will depend on who the plan’s winners and losers are, and how the media and propaganda apparatus of right-wing think tanks and lobbyists present this to the public. And, of course, how effectively Democrats fight the plan’s anti-progressive elements.
What’s needed in place of this gift to the 1 percent is progressive tax reform, elements of which both Hillary Clinton and Bernie Sanders proposed during the 2016 campaign. That, of course, is not what Republicans have in mind in the plan they have been working on behind the scenes for several months. Many details have not been announced or must still be worked out. Axios has posted a summary of the existing GOP framework here.
This is what stands out:
Corporate tax rate cut. The plan calls for cutting the current corporate income tax from 35 percent to 20 percent. It also would create a 25 percent tax for “pass through” businesses. These account for most of the nation’s business income and are currently taxed at individual rates. The corporate rate cut would, supporters claim, increase investment. But current investment in many areas of the economy are low not because of supposedly onerous taxes but because of a lack of strong consumer demand. A tax cut won’t fix that. Instead, many of those windfall billions will go where a good portion of corporate profits have been already going for years: into stock buybacks and increased compensation of top executives.
Lower taxes for the top tier, higher for the bottom. The framework proposes that the current top individual rate be reduced from 39.6 percent to 35 percent, with the lowest rate increased from 10 percent to 12 percent.