President Trump ran as a populist. He was a guy who was going to cut taxes for the middle class and, unlike many GOP candidates, even raise them on wealthy people like himself.
As with many things, this was a stone-cold promise. Trump said, “They will go up a little bit,” and, “In my plan, they're going down, but by the time it's negotiated, they'll go up.” Treasury Secretary Steven Mnuchin, meanwhile, said as recently as February that “there would be no absolute tax cut for the upper class.” It was even called the “Mnuchin rule” — a label Mnuchin embraced.
These promises apparently aren't promises anymore.
GEORGE STEPHANOPOULOS: Can you guarantee that no one in the middle class is going to pay more?
MNUCHIN: That's our objective. Absolutely.
STEPHANOPOULOS: Is it a guarantee?
MNUCHIN: I can't make any guarantees until this thing is done and on the president's desk. But I can tell you, that’s our number one objective in this.
Stephanopoulos then asked Mnuchin about the “Mnuchin rule” that there would be no absolute tax cuts for the upper class. Mnuchin wouldn't repeat that promise, either.
STEPHANOPOULOS: Are you still promising no absolute tax cuts for the wealthy?
MNUCHIN: Again, what I'd say — that's the objective. But we're working with Congress, we're working with the House and the Senate, we're having listening sessions, and this is about turning into a bill that will get signed.
STEPHANOPOULOS: But the objective is no absolute tax cuts for the wealthy?
MNUCHIN: That's the objective, and we'll see where we get from here.
“We'll see where we get from here.” Apparently the “Mnuchin rule” is now more of a “Mnuchin objective.”
Points to Mnuchin for being honest here. But saying that your “middle-class tax cut” may not cut taxes for all of the middle class is a pretty ominous admission — especially as you say that's your No. 1 goal. (If that's your No. 1 goal, it would stand to reason that it's nonnegotiable.) And Mnuchin's decision not to double down on the “Mnuchin rule” is also pretty telling about where things are headed.
Yet again, we have a situation in which Trump and his aides' past rhetoric is catching up with them. His tax reform package, even without many details being released, is already clearly at risk of breaking the promise to raise or at least not cut taxes for the wealthy. And that writing has been on the wall for a while, as The Post's Catherine Rampell and others have written before.
But the White House is bent on making sure this is labeled a “middle-class tax cut.” And their ability to make that label stick is both dubious and hugely important.
The more this bill is credibly labeled a tax cut mostly for the wealthy, the less likely it is that it will pass. A Gallup poll last year showed just 15 percent of Americans thought the wealthy paid too much in taxes, versus 61 percent who said they paid too little. Even Republicans were more likely to say the rich pay too little (45 percent) than too much (20 percent).
The challenge for Republicans will be to argue that the deductions that are being eliminated would offset the cuts in the overall tax rates that wealthy people pay. The Brookings Institution's Vanessa Williamson, who has conducted extensive interviews of Americans' attitudes toward taxation, told Wonkblog last month: “If you ask people what bothers them most about taxes, the most common answer is that they think either corporations or the wealthy aren’t paying their fair share. But people tend to understand this as a problem of loopholes. They think that the reason rich people aren’t paying enough is that they have access to all these special deductions.”
That's the path forward for the GOP, but it's a tough needle to thread. Deductions are complicated and difficult to explain — especially how they would impact different kinds of wealthy people and businesses; the overall tax rate being cut for the wealthy going down is very easy to put in a 30-second ad.
And it's particularly potent when you can contrast it with clear promises not to cut taxes for the wealthy.
Update: White House press secretary Sean Spicer was firmer on the middle-class guarantee at today's briefing. Asked about Mnuchin's comments, Spicer said, “Everyone in the middle class should know that this plan from the White House is going to put more money in their pocket.”