Trump’s new 11th hour mid-term election rallying cry is again taxes, and this time it’s a deal for those who were left out of the last bonanza—the middle class. But the vague plan is being criticized as a fake, pre-election stunt at worst; and at best, something that could only happen next year, and only if Republicans maintain control Congress.
Details on the proposed tax cut part two are lacking, other than to say that middle-income families could get a 10-percent tax break. Of course, if the plan is to cut 10 percent from a specific income bracket, the wealthy will also benefit due to the graduated scale.
In Trump’s quest to win over middle-class Americans who have not presented themselves as grateful for the first tax cuts that largely benefited corporates and the wealthy, he has likely overstepped by suggesting that Congress would pass this right away.
As the New York Times noted, Congress isn’t in session until after mid-term elections, and the cat has since been let out on the bag on this one. This tax cut proposal may buy some votes, but it’s far less likely to see the light of day anytime soon.
Republicans themselves were taken by surprise with Trump’s sudden announcement that there would be “a major tax cut for middle-income people” come November. Now the GOP is trying to play catch up and figure out what the details of that promise might entail.
Even the GOP knows this isn’t going to happen unless the Republicans retain control of the House and Senate.
As the Huffington Post noted, Kevin Brady (R-Texas), chairman of the House Ways and Means, stated on Tuesday last week that his tax-writing committee would “continue” to work on the tax plan “to be advanced as Republicans retain the House and Senate”. Related: Will Gold Benefit As Rome And Brussels Face Off?
In other words, no tax plan is expected if the Republicans do not retain the House and Senate, and at this point that is highly uncertain.
Brady, who is the leading lawmaker on taxes for the U.S. House of Representatives, told media Sunday that Trump’s new tax cut plan was unlikely to get any attention from Congress this year. More to the point, it’s unlikely to see any action at all if Republicans failed to keep their majority in mid-term elections.
“Really common sense tells you that this (Trump’s new tax cut plan) is something, that as the Republicans retain the House and the Senate, that will advance in the new Congress,” Representative Kevin Brady said on Fox News, as reported by Reuters.
Greg Valliere, chief global strategist at Horizon Investments, told Business Insider that the new tax cut plan was “the height of cynicism, promising more candy ahead of an election”.
Similarly, Business Insider cited Compass Point policy analyst Isaac Boltansky as calling Trump’s move “political theater” that “wouldn’t make it on Broadway as it lacks specificity”. The “rollout was shambolic,” he said, “and we knew how it would end the minute it began.”
It’s a tough ask—even of Republicans--at a time when growing federal debt is looming large, having hit over $21 trillion, with a deficit that’s risen 17 percent for the fiscal year ending September 20th, reaching $779 billion. That’s the highest level since 2012, despite a growing economy.
By Fred Dunkley for Safehaven.com
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