Report: In 2020, GOP To Run On Additional Tax Cuts Despite Cratering Deficits
The USA Today editorial board skewered Republicans earlier this month over their plan to focus 2020 campaigning on another round of tax cuts — which the board suggested is ludicrous considering the failure of the first round.
The Washington Post reported in late October that congressional Republicans had begun talks with the White House over President Donald Trump’s desired “tax cuts 2.0” package, though at that time, discussions were preliminary with little detail to report.
Any tax cuts Republicans might come up with “would face certain death in the Democrat-controlled House,” The Post noted, “but Republicans are hopeful it could give them a new platform to run on in 2020.”
Looking back at the first round of tax cuts in 2017, USA Today’s editorial board lamented that scant benefit was generated, leaving one to wonder why Republicans would think a second batch would be much different.
Citing evidence that Trump’s initial tax cuts were a dud, the board noted:
- "There is relatively little that tax cuts can do to boost an economic expansion growing long in the tooth."
- "The stimulative effects of the tax cuts were offset in part by the depressive effects of Trump’s trade wars."
- "The tax cuts were heavily focused on corporations (which used a lot of the money to buy back stock and pay down debts) and wealthy individuals (who had no real reason to dramatically change their behavior)."
What’s more, despite Trump’s prediction that his $1.5 trillion tax cuts package could push economic growth “to 4, 5 and maybe even 6%, ultimately,” growth for 2018 was 2.9 percent — and “next year’s projections range from 2% to outright recession.”
The federal deficit has fared poorly as well, with September closing a fiscal year that saw the government spend $984 billion more than it collected in taxes: “The 2019 deficit was more than double what it was in 2015 and up from $160 billion in 2007, before the Great Recession.”
The editorial board said Trump’s tax cuts were primarily “an effort to reward key GOP constituencies, to punish blue states by capping the deduction for state and local taxes, and to give just enough of a jolt to the economy to ensure that any recession is pushed back beyond next year’s election.”
“That wasn’t much of a rationale then. And it certainly is not much of one now,” the board concluded.