President Trump keeps touting his puzzling — some might say bogus — promise of a new 10 percent middle-class tax cut. At a rally in Houston Monday night, Trump again brought up the idea he first floated on Saturday, saying that Rep. Kevin Brady (R-TX), chairman of the House Ways and Means Committee, was working on the plan.
“We are going to be putting in a 10 percent tax cut for middle-income families,” Trump said at the rally. “It’s going to be put in next week. Ten percent tax cut. Kevin Brady is working on it. We have been working on it for a few months — a 10 percent brand new. That is in addition to the big tax cuts you have already gotten.”
1. Nobody seems to know what Trump is talking about. Trump’s pre-election pledge of a new tax cut set off a scramble among administration officials and lawmakers who had no idea what the president was talking about. “White House officials spent the day trying to decode what Trump meant because no one knew the substance of any such tax cut, or had seen any policy proposal related to it,” Politico reported Monday. And spokespeople for Brady and House Speaker Paul Ryan referred reporters’ questions to the White House. Lindsay Walters, a White House spokeswoman, told news outlets Monday that the president was looking for an addition to the package of tax changes recently passed by the House. "As part of Tax Reform 2.0, the first elements of which were passed the House in September, the President would like to see an additional tax cut of 10% for middle-income families," Walters said. Treasury Secretary Steven Mnuchin had earlier told The New York Times that the middle-class tax cuts “would be different than what the House had already passed.”
2. It can’t happen quickly... Trump’s top economic adviser, Larry Kudlow, seemingly acknowledged on Tuesday that any new tax cut plan couldn’t happen in the short timeframe Trump indicated. "It may not surface for a while," Kudlow told reporters, according to The Hill. “But that's his goal. That's his policy intent. I don't see anything wrong with that.”
3. … and might not be possible at all. Congress isn’t in session until after the November 6 elections, and a vote in the lame-duck session after the election is highly unlikely, even if the administration does issue some plan by then. If Democrats win control of the House, their agenda for 2019 likely wouldn’t include a new Trump tax cut — and even some Republicans might be hard-pressed to back additional tax cuts that would cost about $2 trillion over 10 years. “It's nearly impossible to imagine a scenario in which an additional massive, deficit-ballooning 10% tax cut would pass in either chamber of Congress,” CNBC’s Christina Wilkie says.
The bottom line: This middle-class tax cut isn’t happening this year. “This doesn't pass the smell test or the laugh test," Greg Valliere, chief global strategist for Horizon Investments, told Politico. But that reality may not matter much right now. And while some pundits argue that this new promise only serves as a tacit acknowledgment — and reminder to voters — that last year’s tax cuts were skewed to the wealthy, that might not matter much either. With just days left to go before the election, Trump has gotten plenty of media attention for his mysterious promises of more middle-class tax cuts, and that might be all he wanted — and enough to keep Republicans happy. As one conservative lobbyist told Politico: “Nobody is taking it seriously, but we’d rather have him talking about tax cuts than some of the crazy stuff he usually talks about.”