THE TICKER

President Trump’s campaign has reportedly fired three pollsters after internal numbers showing him trailing Democratic challengers in key states leaked to the media. 

But there’s another set of numbers that should arguably concern the Trump reelection effort just as much: Corporate tax revenue is down 9 percent this year after dropping 31 percent last year, Politico’s Brian Faler reported Friday, dragging big business tax collections to their lowest levels in more than a half-century. 

Those figures open a fresh line of attack for Democratic presidential hopefuls. They are eager to cast Trump’s signature domestic achievement, the 2017 tax overhaul, as a giveaway to the rich while proposing to roll it back to fund pricey policy proposals. 

It isn’t entirely clear what’s behind the dramatic drop-off. “Analysts agree they can’t yet explain the decline in corporate tax payments,” Faler writes. “They have a host of theories though, such as businesses making wider-than-expected use of the law’s expanded breaks for business investments. It may also be an unexpected side effect of [Trump’s] trade wars.”

Nevertheless, the phenomenon defies official expectations. The Congressional Budget Office projected that after a dip in 2017, collections would rise by 20 percent this year. 

Democratic presidential hopefuls aren’t concerning themselves with the nuance. From former vice president Joe Biden to Sen. Bernie Sanders (I-Vt.), the critique has been largely the same: Trump and the GOP blew a hole in the budget with a needless giveaway to corporations and the superwealthy, thereby denying resources to lower- and middle-income workers. 

“Rolling back these toxic Trump tax cuts alone, to me, is important,” Sen. Cory Booker (D-N.J.) told CNBC’s John Harwood last week.

The senator said doing so could help pay for his plan to hand out “baby bonds,” which carries an estimated $2 trillion price tag. “When you say I can’t pay for it just by rolling back the Trump tax cuts, I can tell you from the estate tax to the Trump tax cuts, I could give you the math on how we’re going to do this.”

Biden, for his part, has said repealing Trump's tax cuts would be his first priority in office. This month, he unveiled a plan to pump $1.7 trillion into clean-energy research and infrastructure overhauls, funded in party by rolling back the cuts. While the former veep wasn’t specific about how he’d change the code, Biden's campaign said he would pay for the program by “reversing the excesses of the Trump tax cuts for corporations, reducing incentives for tax havens, evasion and outsourcing, ensuring corporations pay their fair share, closing other loopholes in our tax code that reward work, not wealth, and ending subsidies for fossil fuels." (Biden also singled out Amazon last week for paying no federal taxes in 2018, prompting a sharp response from the company — and signaling once again that the issue will remain front and center in the campaign.)

Similarly, Sen. Kamala Harris (D-Calif.) has said she would fund her proposed $500 monthly tax credit for lower-income families — a plan projected to cost $2 trillion over a decade — by scotching Trump’s tax cuts. “On Day One, we are going to repeal that tax bill that benefited the top 1% and the biggest corporations of America,” she said this year. 

Sen. Elizabeth Warren (D-Mass.), who has set the pace for the field in rolling out detailed policy pitches, proposes to go much further than repealing Trump’s tax cuts. She’s advocating a series of new tax hikes concentrated on the wealthy to fund an ambitious array of new programs.

“Ms. Warren would seek big tax increases on the wealthiest individuals and corporations, creating a new tax on household assets that exceed $50 million as well as a new tax on corporate profits," the New York Times’s Thomas Kaplan and Jim Tankersley wrote last week. “From those two steps alone, she says she would raise at least $3.8 trillion over a decade — money that would go toward her plans on student debt cancellation, free college, child care, the opioid crisis and green manufacturing.”

Of course, having a plan to pay for a plan isn’t the same as having a plan to pass it through a closely and bitterly divided Congress. In the meantime, however, polls show Democrats are on solid ground politically going after the Trump tax cuts. Among recent surveys of voter opinion on the law, Gallup in April found 40 percent approve of the measure while 49 percent disapprove. 

CORRECTION: Friday’s note said the federal budget deficit is on track to top $1 trillion for the first time in history. In fact, the deficit exceeded that threshold from 2009 to 2012. 

MARKET MOVERS

Fed eyes insurance-policy rate cut. WSJ's Nick Timiraos: "The Federal Reserve usually cuts interest rates because bad things are happening. Sometimes, though, it cuts rates because the risk of bad things has gone up—like taking out an insurance policy. That’s how some analysts characterize the current case for cutting rates, and they cite 1995 as the parallel. Back then, the Fed lowered rates in time to prevent an economic slowdown from turning into a recession.

"Fed officials are set to consider at their meeting Tuesday and Wednesday whether a worsening of trade tensions since their April 30-May 1 meeting and the recent slowdown in hiring and industrial activity might warrant similar insurance, if not this week, then later this summer."

Are markets too optimistic about the Fed, G20? Bloomberg's Joanna Ossinger: "Financial markets are signaling investors see little risk of disruption from upcoming events, despite the potential for major shifts in the course of Federal Reserve policy and U.S.-China trade negotiations. The range of options for this week’s Fed meeting spans a surprise interest-rate cut, a set-up of one down the road or a continued stance of patience, given still-solid economic growth. Late next week, the outcomes of the Group-of-20 summit look binary: either U.S.-China trade talks get back on track, or investors must anticipate further tariff hikes. And the usual run of data must be added to the mix, such as the July 5 payroll report.

"Yet despite the potential for major market moves from these events, JPMorgan Chase & Co. strategists estimate that the embedded volatility risk premium is 'significantly' below its historical average."

Bond strategists warn the Fed may not act quickly. Bloomberg's Liz McCormick: "Strategists at Charles Schwab, TD Securities and UBS are among those saying traders may be wrong to only factor in negative trade outcomes that would warrant an imminent reduction in borrowing costs. Many Fed watchers say the economic headwinds are enough for the central bank to retire its mantra of being patient on policy. Yet for the three firms above, committing to cuts would be premature before this month’s Group-of-20 summit, where a resolution of the tariff standoff remains a possibility."

Goldman Sachs economists are also skeptical. In a note this weekend, the bank's economists argue cuts aren't necessarily coming this year: "One key assumption behind the insurance story is that policymakers can reverse the cuts once the risk abates. Indeed, the Greenspan Fed moved rates back up soon after the 1995-96 and 1998 cuts (in March 1997 and June 1999, respectively). However, the greater political scrutiny of Fed hikes now—especially with a presidential election approaching—could make this harder to do in 2020, so that overly hasty insurance cuts now might increase the risk that the funds rate gets stuck at too low a level if the economy remains resilient."

TRUMP TRACKER

TRADE FLY-AROUND:

New China tariffs advance with USTR hearinigs. WSJ's Anthony DeBarros and Josh Zumbrun: "The U.S.-China trade conflict is moving closer to home. Consumer items, largely spared by existing tariffs on Chinese imports, would face 25% levies under the Trump administration’s plan targeting $300 billion of Chinese goods that haven’t yet been taxed. On Monday, the Office of the U.S. Trade Representative is due to open seven days of hearings on the new tariffs to solicit public comment, ending June 25. That is to be followed by a one-week period for submission of written comments, after which [Trump' could direct the office to impose the new tariffs...

"The biggest targets would be mobile phones and laptops... The U.S. imported $43 billion in mobile phones last year from China, and $37 billion in laptops, data shows. Other major categories facing the looming possibility of tariffs: $11.9 billion of children’s vehicles like tricycles and scooters, $5.4 billion of videogame consoles and $4.6 billion of computer monitors."

Ross downplays hope for U.S.-China breakthrough. WSJ's Josh Zumbrun: "Commerce Secretary Wilbur Ross played down prospects of a major trade deal if [Trump] and China’s President Xi Jinping meet at the Group of 20 summit in Japan later this month, but he said he believes the two sides will ultimately get back to negotiations. 'I think the most that will come out of the G-20 might be an agreement to actively resume talks,' Mr. Ross said in a phone interview Sunday. 'At the presidential level they’re not going to talk about the details of how do you enforce a trade agreement.'"

BUT Pantheon Macroeconomics chief economist Ian Shepherdson argues "peak trade war" has already past. In a weekend note, he wrote: "We are pretty convinced now that the broadening of tariffs on Chinese imports won't happen. Hitting $300B-worth of consumer goods with tariffs, thereby pushing up the price of everything at Wal-Mart, would strike existential fear into the heart of Congressional Republicans, and they would push back hard, along with the retail lobby and advocates for low-income families, who would suffer most.

"We'd also be surprised to see any further increase in the existing tariffs, and we remain quite hopeful that an outline trade deal, leading eventually to the removal of most of these tariffs, will be struck in Osaka in two weeks' time."

U.S. chipmakers lobby to ease Huawei ban. Reuters's Stephen Nellis and Alexandra Alper: "Huawei’s American chip suppliers, including Qualcomm and Intel, are quietly pressing the U.S. government to ease its ban on sales to the Chinese tech giant, even as Huawei itself avoids typical government lobbying, people familiar with the situation said...

"Chip makers argue that Huawei units selling products such as smartphones and computer servers use commonly available parts and are unlikely to present the same security concerns as the Chinese technology firm’s 5G networking gear, according to three people. 'This isn’t about helping Huawei. It’s about preventing harm to American companies,' one of the people said."

India slaps tariffs on U.S. imports. CNN Business's Rishi Iyengar: "India just increased tariffs on US exports, dealing another blow to fragile global trade. The tariffs on 28 US products, announced on Saturday by India's Finance Ministry, went into effect Sunday. The goods targeted include American apples — which will be hit with a 70% tariff — as well as almonds, lentils and several chemical products. India first announced plans to impose new tariffs a year ago in retaliation for increased US import duties on Indian steel and aluminum. But it repeatedly delayed imposing them while the two sides held a series of trade talks."

POCKET CHANGE

Goldman builds a mini-Blackstone. WSJ's Liz Hoffmann: "Goldman Sachs Group Inc. is building a mini- Blackstone Group LP in a bid to boost a flagging stock price. The Wall Street firm is pulling together four separate units that invest in private companies, real estate and other hard-to-access deals, creating a new unit and planning a fundraising blitz, according to people familiar with the matter. Goldman is trying to grow the kind of steady, income-generating business that investors like.

"The division’s exact makeup will take shape over the next few months, but it is likely to have around $140 billion in assets, making it nearly as big as KKR & Co. and about one-third the size of Blackstone."

MONEY ON THE HILL

GOP infighting on budget raises default specter. The Post's Erica Werner and Seung Min Kim: "Senate Republicans and the Trump administration are struggling to reach an agreement on a path forward on critical budget and spending issues, threatening not only another government shutdown and deep spending cuts but a federal default that could hit the economy hard.

"GOP leaders have spent months cajoling [Trump] in favor of a bipartisan budget deal that would fund the government and raise the limit on federal borrowing this fall, but their efforts have yet to produce a deal. And the uncertain path forward was underscored a few days ago at the Capitol, when a budget meeting between key Senate Republicans, including Majority Leader Mitch McConnell (R-Ky.), and senior White House officials left out Democrats, whose votes will be imperative to avoid a shutdown and an economy-shaking breach of the federal debt limit."

Leaders will meet again this week on a spending deal. Politico's John Bresnahan and Burgess Everett: "Top congressional leaders from both parties will meet with senior White House officials this week as the Trump administration and Congress try once again to reach a deal to avoid tens of billions of dollars in automatic spending cuts this fall, according to congressional and administration officials. Yet both sides acknowledge they're not close to an agreement at this point, with even Senate Republicans and the White House unable to fully hash out a common position among themselves."

2020 Dems woo Wall Street. NYT's Shane Goldmacher: "The behind-the-scenes competition for Wall Street money in the 2020 presidential race is reaching a fevered peak this week as no less than nine Democrats are holding New York fund-raisers in a span of nine days, racing ahead of a June 30 filing deadline when they must disclose their latest financial hauls. With millions of dollars on the line, top New York donors are already beginning to pick favorites, and three candidates are generating most of the buzz: former Vice President Joseph R. Biden Jr., Senator Kamala Harris of California and Mayor Pete Buttigieg of South Bend, Ind."

THE FUNNIES

From The Post's Tom Toles

BULL SESSION