The Republican party—the party of the Kemp-Roth tax cuts, the Laffer curve, the George W. Bush tax cuts, and the Obama-era extension of nearly all of those Bush tax cuts—currently controls both houses of Congress and the presidency. That means the GOP has its best chance in more than a generation to implement a fundamental tax reform. Will one of the hallmarks of the tax reform bill that may end up on President Trump’s desk actually…raise the top marginal rate?
That’s what Jonathan Swan of Axios says one of the president’s top aides is advising him to embrace. Steve Bannon, the economic nationalist with a penchant for riling up the Republican establishment and its conventional wisdom, is reportedly “causing a stir” within the Trump White House by pushing for an increase on the marginal rate for the highest earners, which is currently at 39.6 percent. According to Swan, “Bannon has told colleagues he wants the top income tax bracket to ‘have a 4 in front of it.’”
Bannon’s suggestion to set the top rate at 40 percent or above would be 180-degree-turn from the actual White House proposal, which was released in April and lowers that rate to 35 percent. I’m told that Bannon may have offered this suggestion back when the administration was working on its proposal. But right now, as Trump’s tax reform team works with Congress on the details, there are no plans for the White House to modify its proposal or get behind the idea of raising the top marginal rate from where it is currently.
“We’re beyond that,” one senior administration official told White House Watch.
Tax Talks Continue on Capitol Hill
It would be ludicrous to assume any final tax reform bill would look exactly like the White House’s original proposal. Gary Cohn, the director of the National Economic Council, and Treasury Secretary Steve Mnuchin, go to Capitol Hill on a weekly basis to negotiate with GOP leadership and the Republican chairs of the tax committees.
And those Hill Republicans have been skeptical of the White House’s optimistic benchmarks for tax reform since the beginning. Simplifying the code (down to three brackets) and lowering rates has to get paid for somewhere if the plan is to be revenue neutral. Getting rid of nearly all deductions won’t cover it, and so the White House and Congress will have to hammer out details to make tax reform work. That could mean a top marginal rate higher than 35 percent. But higher than the current rate? Perhaps Steve Bannon is holding his own negotiations on the Hill, but it’s hard to believe there’s much more appetite in the Republican conferences for raising the rate than there is in the White House.
So why would Bannon float his “four-in-front-of-it” idea now, when the White House is already committed to negotiating from its own publicly stated baseline of 35 percent? There’s little purchase among Republicans in Congress for Bannon and Trump’s economic nationalism and populism. Most House and Senate members are traditional conservatives on taxes, often to a fault, and there’s no indication that Republicans are itching to get Trumpy on taxes quite yet.
One possibility: Bannon is looking a little farther down the road, politically, at how the Republican party will be constituted, and who will constitute it. The more downscale voters the GOP has attracted in recent years, even before Trump’s presidency, may be less keen than Republicans of years past on keeping tax cuts for millionaires and billionaires. In this view, there’s more than a little Bernie-ism among Trump voters on whether the rich are and should pay their “fair share.”
Bannon likely believes he’s not a monster on Republican tax orthodoxy—he’s just ahead of the curve.
Trump Tweets, Media Go Crazy, Rinse, Repeat
After a week of antagonizing the media (and sometimes specific members of it), President Trump threw more gasoline on the fire Sunday morning when he tweeted a video that depicted him tackling and punching a man with a CNN logo over his face.
“#FraudNewsCNN,” the president captioned the video, an edited version of a 2007 WrestleMania clip.
The tweet, which was posted both on Trump’s personal Twitter and on the official presidential page, was the latest broadside in Trump’s longstanding feud with the mainstream media and CNN in particular. Media personalities rushed to condemn the tweet, with some saying that it promoted violence.
“It’s a sad day when the President of the United States encourages violence against reporters,” CNN said in a statement.
“He is going to get somebody killed in the media,” CNN contributor Ana Navarro told George Stephanopoulos on ABC’s This Week Sunday morning.
On the same program, homeland security adviser Tom Bossert dismissed that the tweet should be construed as an incitement to violence.
Seth Mandel, an editor at the New York Post, tweeted: “Surprised it needs to be said, but: the problem w/ the wrestling tweet is that is was stupid & juvenile. Not that it was literal incitement.”
“No one would perceive that as a threat; I hope they don’t,” Bossert said. “But I do think that he’s beating up in a way on cable platforms that he has a right to respond to.”
The president, an avid and regular cable news viewer, has been provoking and needling the news media for years. But his attacks have taken on new intensity over the past week. Trump blasted outlets from ABC News to the New York Times as “fake news.” But CNN has received the bulk of his ire, which intensified after the network was forced to retract a story last month that tied his presidential campaign to Russian collusion in the election.
Many Republicans have called for Trump to abandon the sideshow of his personal Twitter, which they lament distracts from his governance. The White House has long maintained that the president’s Twitter account is one of his greatest weapons, allowing him to circumvent the media and speak directly to the people.
The man Trump jumped in the original video is Vince McMahon, the chairman of World Wrestling Entertainment. McMahon’s wife, Linda McMahon, is the administrator of the Small Business Administration and a member of Trump’s cabinet.
