But this provides an occasion to reconsider just how much of a betrayal of Trump’s campaign promises this plan truly embodies, in a sense that goes well beyond his bottom line. That betrayal does not merely consist in Trump reversing course on his promise to help the middle class while sticking it to elites. No, the betrayal is more complicated, and runs much deeper, than that.
During the campaign, Trump told a story, mainly aimed at working-class whites in places that have gotten pulverized amid the globalizing economy and the brutal aftermath of a financial crash caused by reckless elite financial gamesmanship that left the top 1 percent relatively unscathed. That story went like this: I’m not like other politicians (Republicans included) or like other members of that financial elite. They have conspired with one another to fleece you blind. I got filthy rich milking the system. I will put my knowledge of how we elites engorged ourselves to work for you.
This is what Trump meant when he openly admitted during the campaign that “I fight very hard to pay as little tax as possible,” when he said that not paying income taxes “makes me smart,” and when he flatly declared that big donors “are in total control” of the presidential candidates, his GOP rivals included. “I was on the other side all my life and I’ve always made large contributions,” Trump said, “and I’m the only one up here that’s going to be able to fix that system.” In other words, people like me have gotten rich by buying the politicians and getting them to rig the system in our favor, and I have the inside knowledge of the scam to put things right.
Now Trump and the politicians, working together, are set to pass a tax plan that will lavish enormous benefits on people like Trump — and in key ways further rigs the system on their behalf.
In a big speech yesterday about the plan, Trump declared that “this is going to cost me a fortune” and added: “I have some very wealthy friends” who are “not so happy with me.” But as Kessler’s fact-check shows, this is nonsense. Both GOP plans repeal the estate tax or make the exemption vastly larger (which would benefit Trump’s family after he shuffles off to account for his life to his maker). They repeal the Alternative Minimum Tax, which is designed to ensure that the rich pay at least something. They both give preferential treatment to “pass-through” income, the vast bulk of which goes to the top 1 percent, and Trump owns an untold number of pass-throughs.
We don’t know precisely how the final plan would apply to him now, but this is because Trump has not released his tax returns (his argument is basically, “I’ll lose out bigly, believe me”). But based on 2005 Trump tax returns that have leaked, Kessler shows, under the plan Trump would have saved anywhere from $35 million to $42 million that year.
But this is not just about Trump. The Senate tax plan is basically a huge permanent corporate tax cut, tailored to fit within deficit and procedural constraints by setting the benefits for the working and middle class to expire, making it possible to pass entirely on party lines a large permanent tax cut overwhelmingly benefiting the top 1 percent, facilitated by a tax hike later for as many as 50 percent of less-fortunate taxpayers. This sort of legislative chicanery is, at bottom, just what Trump decried — very wealthy donors benefiting from politicians cleverly gaming the system on their behalf. It’s the very scam Trump vowed to put to an end.
Meanwhile, Sen. Ron Johnson (R-Wis.) is demanding even more generous treatment of pass-through income. But as one tax analyst explains, this may encourage more wealthy people — who are more prone to having the resources and know-how to work the tax system — to reclassify their income as pass-through and lower their tax burden further. Both bills are meant to have safeguards against such gaming. But as Dylan Matthews points out, good lawyers are already hatching ways around this, meaning these new tax breaks “will create a big new loophole for the rich.” In other words, still more system-rigging.
In a sense, then, Trump’s claim that he — and people like him — will personally take a financial beating from this plan represents the culmination of the false story he made absolutely central to his campaign, and serves as a reminder of just how massive a betrayal of that story he and Republicans are now set to pull off.
* ANALYSIS OF TAX PLAN MYSTERIOUSLY FAILS TO APPEAR: The New York Times reports that Treasury Secretary Steven Mnuchin had promised to release an analysis showing that the GOP tax plan would pay for itself with explosive growth. But:
Just one day before the full Senate prepares to vote on a sweeping tax rewrite, the administration has yet to produce the type of economic analysis that it is citing as a reason to pass the tax cut. … An economist at the Office of Tax Analysis, who spoke on the condition of anonymity so as not to jeopardize his job, said Treasury had not released a “dynamic” analysis showing that the tax plan would be paid for with economic growth because one did not exist.
What a shocker. You’d think this would be of interest to Sens. Bob Corker, Jeff Flake and John McCain, who say they don’t want to support tax cuts that explode the deficit.
* GOP LEADERS SCOFF AT RON JOHNSON’S THREATS: Sen. Ron Johnson (Wis.) is demanding even more generous treatment of “pass-throughs,” 70 percent of whose income go to the top 1 percent. But The Washington Examiner reports:
Senate Majority Leader Mitch McConnell, R-Ky., and his lieutenants, accustomed to Johnson’s bluster, aren’t that worried. The senator often fumes about key aspects of major legislation and complains about being excluded from the drafting process, only to vote “yes” upon final passage.
Of course. Johnson is going to vote yes no matter what. All he’s doing is trying to squeeze out what he can (by the way, Johnson himself owns a pass-through).
* QUOTE OF THE DAY, GOP-DONOR-CLASS EDITION: Here’s a withering assessment of the GOP tax plan, from Edward D. Kleinbard, a University of Southern California law professional who used to serve on the Congressional Joint Committee on Taxation:
“It’s not aimed at growth. It is not aimed at the middle class. It is at every turn carefully engineered to deliver a kiss to the donor class.”
It’s worth repeating that multiple Republicans have admitted on the record that this tax plan is about appeasing their angry donors. It’s all out there in plain sight.
* SESSIONS FACES GRILLING: Attorney General Jeff Sessions testifies today behind closed doors in the House Intelligence Committee’s Russia probe, and Bloomberg reports that Democrats want to pin down “what they see as his inconsistencies”:
Democratic criticism of Sessions deepened after Special Counsel Robert Mueller … filed court documents in October about a meeting Sessions attended in March 2016. At the meeting, George Papadopoulos, an unpaid adviser, boasted of his Russian connections and said he could help arrange a meeting between Trump and Russian President Vladimir Putin. Democrats weren’t satisfied by Sessions’s appearance before the House Judiciary Committee on Nov. 14, when he said he now remembers the meeting but didn’t have a clear recollection of the details.
For the larger context here, go back and read this Post story on the pattern of forgetfulness about Trump’s top campaign advisers when it comes to meetings with Russians.
* MAYOR OF LONDON RIPS TRUMP: The president’s retweets of British far-right anti-Muslim propaganda videos has now prompted this very harsh statement from London’s Muslim mayor, Sadiq Khan:
Trump yesterday used Twitter to promote a vile, extremist group that exists solely to sow division and hatred in our country. … It beggars belief that the President of our closest ally doesn’t see that his support of this extremist group actively undermines the values of tolerance and diversity that makes Britain so great.
But seriously, if Trump is getting weenie Euro-elites angry, that can only mean he’s Making America Great Again, right?
* TRUMP’S ROT RUNS VERY DEEP IN THE GOP: E.J. Dionne Jr. gets it just right on the Republicans’ ongoing enabling of Trump’s dangerous behavior and shredding of democratic norms, and what it really means about our political system:
They dare not take on Trump because doing so might derail the pursuit of what are now their party’s only driving purposes: court packing, the care and feeding of the privileged, and the gutting of federal social services and regulation. This, too, is a form of corruption, a refusal to face larger questions when partisan political victories are at hand. … the corruption Trump exemplifies has seeped deeply into the Republican Party and substantial segments of the conservative movement.
As Dionne says, really the only recourse left at this point is politics.
* GET READY FOR TRUMP, UNBOUND: Axios reports on the current thinking of people around Trump: