The rich keep wanting to get richer, so Trump is now playing that base claiming he’ll pass even better tax cuts for them than he did before if they will only get behind him and support him for 2024. It’s like bribery, elect me and I’ll pay you is the reality. Of course, the rich want to get richer, that’s the fun of being rich, you always want more, even when more is the devil.
Although the 2017 GOP tax law proved unpopular, the former president is eyeing deeper cuts to the corporate rate.
As Donald Trump widens his lead over other Republican candidates in the GOP primary, the former president’s closest economic advisers are plotting an aggressive new set of tax cuts to push on the campaign trail and from the Oval Office if he wins a second term.
Trump and his advisers have discussed deeper cuts to both individual and corporate tax rates that would build on his controversial 2017 tax law, which they see as a major accomplishment worth expanding, according to interviews with a half-dozen people close to the former president, some of whom spoke on the condition of anonymity to describe private conversations. The cuts could be paid for, at least in theory, with a new 10 percent tariff on all imports to the United States that Trump has called for, which could raise hundreds of billions in revenue. The sharp new tax cuts would help offset higher consumer costs caused by the tariffs.
The discussions are preliminary and in their early days, particularly because it’s not at all clear that Republicans would control both houses of Congress, even if Trump wins next year. But they illustrate the stakes for economic policy in the 2024 presidential election.
Democrats, including President Biden, have criticized the Trump tax cuts as a giveaway for the wealthy. Democrats included a new 15 percent corporate minimum tax as part of the Inflation Reduction Act they passed with no Republican votes last year.
Trump’s advisers, though, have discussed proposals to make deeper cuts to the overall corporate tax rate, potentially to as low as 15 percent, or to use the revenue from the proposed tariffs to pay a dividend to U.S. households. Further cutting corporate taxes, which would primarily benefit large firms, would contrast with the GOP’s increasing antagonism against publicly traded companies that many Republicans accuse of siding with liberals on cultural issues.
“There’s a lot of conversation right now about what the next tax priorities of a potential Trump administration should be, including lower rates — which he clearly wants to do,” said Arthur Laffer, a Trump adviser and supply-side economist. “Everyone is talking about taxes and what the new Trump administration would do.”
Trump has not identified a potential new corporate tax rate, but has talked publicly of using revenue from new tariffs to reduce taxes on U.S. producers.
“There are many ideas coming in about how to undo the damage Joe Biden has done, and President Trump’s America First economic focus remains how we create more higher-paying jobs for American workers, and he will do whatever it takes to make our Country competitive again,” said Jason Miller, a Trump campaign spokesman, in a statement.
Miller added: “Trump has not yet committed to specific tax cut numbers for his second term agenda, and his focus will be on how best to help American workers. Stay tuned.”
Democrats say they hope the Trump campaign embraces expanding a corporate tax cut that polling has found hurt the GOP, particularly in the 2018 midterm elections, in which Republicans lost control of both the House and Senate. Biden frequently hammers Trump for tax cuts that he says rewarded the wealthy and large corporations.
“It would be astonishing for Trump’s team to double down on the most unpopular parts of the tax cuts, which were the corporate tax cuts, by driving it down even further,” said Steve Wamhoff, federal policy director at the Institute on Taxation and Economic Policy, a left-leaning group. “We have plenty of data showing most Americans want corporations to pay more in taxes, not less — this was true when Trump and his supporters in Congress enacted the 2017 law, and it’s still true today.”
White House spokesman Andrew Bates also panned the proposal in a statement.
“President Biden is pushing every day to grow the American middle class, cut costs for families, and slash our deficits,” Bates said. “But another wave of deficit-increasing tax welfare for big corporations — especially one directly tied to unprecedented price increases on American families — would turn back the clock to the trickledown economics that hollowed out the American middle class and added trillions to the national debt.”
For now, the more immediate priority for Republicans in Congress is extending numerous provisions from the 2017 tax law that are set to expire. Those include credits for corporate investment, as well as a large number of individual provisions set to expire in 2025, including the doubling of the standard deduction and a larger Child Tax Credit.
But those more pressing decisions have not stopped Trump’s circle of economic advisers from contemplating new directions for U.S. tax policy, even as the former president contends with multiple separate criminal indictments. Outside advisers have even begun discussing some potential, if highly preliminary, names for possible treasury secretary nominees, including former World Bank president David Malpass, who announced his resignation amid controversy over his climate positions; Larry Kudlow, the cable news commentator who served as director of Trump’s White House National Economic Council; and Laffer, 83, a former Reagan adviser whom Trump awarded with the Presidential Medal of Freedom in 2019.
Trump’s advisers have pitched him on proposing a 15 percent corporate tax rate, which is what Trump had also initially endorsed for his 2017 tax law, according to Stephen Moore, an outside economic adviser to Trump. The 2017 law slashed the corporate tax rate from 35 percent to 21 percent while also ending some business loopholes, but congressional Republicans resisted Trump’s attempts to reduce it even further.
On the international stage, Biden has sought to create a 15 percent global minimum rate to prevent nations from competing against one another by lowering tax rates below that level. Moore said Trump may counter by proposing a 15 percent rate — right at Biden’s minimum — to show the United States offers the most business-friendly environment. The plan would be coupled with ending corporate tax deductions and other tax breaks, including the new clean energy credits in the Inflation Reduction Act.
“The idea I’ve been talking about with Trump is: Why don’t we go to 15 percent corporate rate, get rid of the credits and deductions, and just make it 15 percent,” Moore said. “That’s one of the ideas that’s being tossed around, as part of a Trump tax reform plan that would be accompanied by the tariff.”
Trump’s proposal to slap a 10 percent tariff on all imports to the United States is also spurring discussion among his allies. The Tax Foundation, a conservative-leaning think tank that opposes tariffs, found that such a measure could raise $300 billion per year in additional government revenue, or roughly $3 trillion over 10 years, although the amount would decrease over time as consumers imported fewer goods. Economists of both parties have bashed the tariff idea, warning that it would drive up costs for U.S. consumers and would risk sparking an international trade war that could damage the global economy.
Still, Trump may propose using that revenue to send a dividend payment to U.S. consumers, similar to how the state of Alaska cuts a check every year to its residents from its oil revenue, according to Newt Gingrich, who served as GOP speaker of the House and remains an outside adviser to the former president. Gingrich stressed that there are “many options” for how to use the revenue.
“If Trump goes down the road of that tariff, there’s a desire to convert that into a tax cut of some kind back in the American people similar to the oil income from the state of Alaska,” Gingrich said. Of the potential for an additional corporate rate cut, Gingrich said it will “be tied with a substantial individual tax cut, too,” although the details of such a plan remain unclear.
Laffer and Moore do not favor the Alaska dividend proposal but said there are many options for how the revenue from the tariff could be used, including to pay down the growing national debt.
“If you were going to do this tariff, you’d have to offset it with other tax cuts. That’s what we’ve been talking about: What would be the most efficient tax cut to offset the impact of the tariff?” Moore said.
Other hurdles could emerge for Trump’s tax plans. When Trump imposed tariffs during his administration, China retaliated with duties on American farmers. Trump responded by showering farmers with tens of billions in government subsidies to insulate them from the fallout of the trade war. Any future tariffs would probably lead to retaliation against U.S. producers that “would likely get the first claim on any tariff revenue,” said Brian Riedl, a policy analyst at the Manhattan Institute, a conservative-leaning think tank. Riedl also said any additional revenue should be used to help close the nation’s roughly $2 trillion deficit.
Still, many Republicans are eager for the chance to seize back control of the government to approve additional tax cuts. Grover Norquist, the anti-tax crusader who leads Americans for Tax Reform, said he is pitching GOP candidates, including Trump’s advisers, to push to lower the corporate tax rate to 14 percent, so it’s below the global minimum tax being pushed by Biden and the Europeans. Norquist also said he is pushing GOP candidates to back lower taxes for Americans who live abroad.
“I’m pushing it wherever I can,” Norquist said of the 14 percent rate. “Everyone gets how great 15 percent would be. But why not 14 percent?”