Behind closed doors, Trump eyes second round of corporate tax cuts
Donald Trump's campaign team says the former president would prioritize cutting taxes for working-class families and small businesses if he returns to the White House. But privately, Trump has told allies that he is keenly interested in cutting corporate tax rates again, according to two people who have spoken with Trump in recent months.
Three of Trump's senior economic policy advisers also said privately that they see the corporate tax cut as an enormous success and believe it should be expanded in a second term. These people spoke on the condition of anonymity to reflect private conversations.
The difference between Trump's private comments on corporate taxes and his campaign's position underscores how the former president frequently governed as a traditional pro-business Republican despite campaigning as a populist outsider. Trump is campaigning on reversing the inflation that has persisted during Biden's administration and bringing financial relief to lower- and middle-class families, but Democrats believe much of his first-term record on the economy - and in particular the tax cuts - makes him vulnerable.
Aiming to address that weakness, Trump and his advisers have discussed abandoning a push for another corporate tax cut in favor of tax cuts for the working class and small businesses. Jason Miller, a Trump campaign spokesman, said in an interview that the former president is focused on preserving his existing 2017 tax cut. After that, Miller said, Trump's priority is securing additional tax cuts for "working class" Americans. Miller also said no decision had been made about whether or how much to cut the corporate tax rate.
Similarly, Stephen Moore, an outside economic adviser to Trump, told The Washington Post this week that cutting taxes for corporations again is not a second-term priority for the former president. Trump's 2017 tax law cut the corporate rate from 35 percent to 21 percent, though Trump at the time wanted to lower it to 15 percent.
"In my most recent conversations with the president, he said that he really wants to focus more on small businesses than corporations. It's quite possible that tax changes would be on the business side, more toward helping small- and medium-sized businesses, than the corporate tax rate," Moore said. "I think he's fine with the corporate rate where it is. He wants to keep intact the tax cut we did in 2017."
The statements from Miller and Moore, however, are at odds with both some of Trump's private remarks over the past several months and comments the former president made publicly as recently as September. Asked by NBC about if he would cut the corporate tax rate to 15 percent, Trump said that he would "like to lower them a little bit if we could."
Democrats have long hammered Trump's tax law as a giveaway to the rich and large corporations, and advisers to Biden believe it provides an opening to blunt Trump's advantage among voters on economic policy.
Nonpartisan estimates have found that Trump's tax cut added more than $2 trillion to the federal debt. In 2018, the richest 20 percent of taxpayers saw an average of $7,600 in savings from the 2017 tax law, compared with just $930 in savings for middle-income households, according to the Tax Policy Center, a nonpartisan think tank. Making the tax cuts permanent would cost $3 trillion, the center said in 2022. More than 60 percent of the benefits would go to the richest 20 percent of Americans, and more than 40 percent of the benefits to those earning above $400,000 annually.
Some studies have found that the 2017 tax law led to a substantial boost in business investment and other economic benefits.
Biden campaign officials have begun convening meetings with outside progressive groups and former senior administration officials to brainstorm how to attack Trump's agenda as geared to the wealthy and what ideas on taxes or economic policies they could use to draw a contrast, according to two other people familiar with these meetings, who also spoke on the condition of anonymity to describe private conversations. Biden has a list of policy proposals from child-care to free community college that differ sharply from Trump's approach - as well as more than a half-dozen ideas for taxing the rich - but it's unclear which messages would resonate best for the president and his surrogates on the campaign trail.
Biden campaigned on increasing the corporate tax rate from 21 percent to 28 percent, although he was unable to do so amid resistance from GOP lawmakers and with only a narrow Democratic majority in Congress.
"From time to time, Trump comes out with these populist statements and policies, so it can be hard to peg him. But when push comes to shove, he has cut taxes for the rich and corporations. If past is prologue, more corporate tax cuts may be on the way," said Steve Rosenthal, senior fellow at the Tax Policy Center. "Corporate taxes clearly divide Republicans and Democrats."
Tax rates for individuals will probably be on the agenda for whoever is president next year, because most of the cuts for individual taxpayers included in the 2017 law expire in 2025. Republicans who wrote the law made the corporate tax cuts permanent but phased out the individual cuts to keep its overall price-tag down.
But other Republicans give differing accounts of the Trump campaign's priorities. Grover Norquist, president of Americans for Tax Reform, said Trump aides had been receptive to his pitch to lower the corporate tax rate to 14 percent. Norquist emphasized that Republicans in Congress structured much of the 2017 legislation, but that the corporate tax cut did reflect Trump's imprint.
"I would be very surprised" if he abandoned the push for lower corporate taxes, Norquist said. "All the people advising him before for sure think the 15 percent is where we need to go."
Even some of the noncorporate tax cuts Republicans may seek to extend primarily benefit high earners, not working-class families. Trump's advisers say he is likely to push to extend one provision of the 2017 law that gives a tax break for "pass-through" firms where owners file the business's taxes on their personal income returns. More than half of that provision benefits taxpayers in the top 1 percent of income distribution, according to the nonpartisan Congressional Budget Office. Republicans are also expected to push for extending the reduction of the estate tax, which primarily benefits wealthy taxpayers - as well as other measures that benefit lower- and middle-class taxpayers, such as the doubling of the standard deduction.
"Republicans are projecting less urgency about enacting really large corporate tax cuts right now, because they already did that and made them permanent," said Steve Wamhoff, director of federal tax policy at the Institute on Taxation and Economic Policy, a left-leaning think tank. "Now they're turning their attention to other tax breaks that mainly benefit rich people.
Some Trump advisers have urged a different approach this time around, at least publicly.
"Trump has an instinct to be a populist, and people are much more worried about the individual rate than the corporate rate," said Newt Gingrich, the former House GOP speaker. "You don't want to get into the classic 'Republicans are helping the big guys' thing."
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