President Trump outlined his tax cut proposal in general terms on Wednesday, generating two lead stories in Thursday’s New York Times under the banner headline “Sweeping Trump Tax Plan Vague on Details and Cost.”
Economics reporter Binyamin Appelbaum’s “news analysis” was as hostile as the headlines: “Windfall Would Go to the Wealthiest.” The online headline: “Trump Tax Plan Benefits Wealthy, Including Trump”:
The tax plan that the Trump administration outlined on Wednesday is a potentially huge windfall for the wealthiest Americans. It would not directly benefit the bottom third of the population. As for the middle class, the benefits appear to be modest.
The administration and its congressional allies are proposing to sharply reduce taxation of business income, primarily benefiting the small share of the population that owns the vast majority of corporate equity. President Trump said on Wednesday that the cuts would increase investment and spur growth, creating broader prosperity. But experts say the upside is limited, not least because the economy is already expanding.
It takes the threat of a tax cut for the Times to admit that the Trump economy is expanding:
The plan would also benefit Mr. Trump and other affluent Americans by eliminating the estate tax, which affects just a few thousand uber-wealthy families each year, and the alternative minimum tax, a safety net designed to prevent tax avoidance.
A text box confirmed: “Trump says cuts would expand the economy; experts see a limited upside”:
A not-particularly-flattering archived photo of Reagan laughing and relaxing at his ranch with his boots propped up on an outside table included this ominous caption, proving the NYT is still fighting Reaganomics: “The public portion of the debt equaled 24 percent of the gross domestic product in 1981 when President Ronald Reagan signed a tax cut at his vacation home near Santa Barbara, Calif. In June of this year, the debt equaled 75 percent of economic output.”
More backhanded compliments for the Trump economy:
But the moment is very different. Mr. Reagan and Mr. Bush cut taxes during recessions. Mr. Trump is proposing to cut taxes during one of the longest economic expansions in American history. It is not clear that the economy can grow much faster; the Federal Reserve has warned that it will seek to offset any stimulus by raising interest rates.
At the time of the earlier cuts, the federal debt was considerably smaller. The public portion of the debt equaled 24 percent of the gross domestic product in 1981, and 31 percent in 2001. In June, the debt equaled 75 percent of economic output.
Appelbaum finally hit some potential positives in paragraph 18:
Proponents of the plan assert that the largest benefits are indirect. In particular, they argue that cutting corporate taxes will unleash economic growth.
Mr. Trump’s plan is more focused on business tax cuts than the Reagan and Bush plans, and economists agree that this makes economic gains more likely.
He used some unlabeled liberal economists to push a key Times agenda: Progressive taxation.
Mr. Trump’s plan also continues a long-term march away from progressive taxation. The federal income tax is the centerpiece of a longstanding bipartisan consensus that wealthy Americans should pay an outsize share of the cost of government.
But successive rounds of tax cuts have eroded that premise, according to research by the economists Thomas Piketty of the Paris School of Economics and Emmanuel Saez of the University of California at Berkeley. In 1980, the wealthiest Americans paid 59 percent of their income in taxes while the middle 20 percent of Americans paid 24.5 percent. After the Bush tax cuts, the wealthiest Americans paid 34.7 percent of their income in taxes, while Americans in the middle income brackets paid 16.1 percent.
He concluded with a quote from a law professor from the Obama administration: “In broad brush strokes, they’re doing nothing for the bottom 35 percent, they’re doing very little and possibly raising taxes on the middle class, and they’ve specified tax cuts for the wealthy.”
Julie Hirschfeld Davis and Alan Rappeport filed a more balanced report, “Urging an Overhaul After Health Care Efforts Falter.” But it still emphasized the idea that the tax cuts were less an economy booster than a giveaway to the wealthy:
But the president offered no measure of the plan’s cost and scant detail about how working people would benefit from a proposal that has explicit and substantial rewards for wealthy people and corporations, including the elimination of taxes on large inheritances and deep reductions in the rates paid by businesses large and small.
Reporter Thomas Kaplan got in another convenient, partisan dig at Republicans for alleged hypocrisy on deficit reduction in “With Tax Cuts on the Table, Once-Mighty Deficit Hawks Hardly Chirp,” posted on Thursday:
In 2001, when surging budget surpluses fueled hopes of extinguishing the national debt, a pitched battle broke out over President George W. Bush’s proposed $1.6 trillion tax cut. Nevermind that the tax cut’s 10-year tab was supposed to leave behind more than $3 trillion in surpluses -- Democrats and some Republicans said that the tax cut was just too large.
Fast forward to President Trump’s Washington, where the budget deficit for this fiscal year is expected to near $700 billion and the federal debt has topped $20 trillion.
A new tax cut is emerging to rival those of the Bush years, and the deficit hawks have hardly peeped.
For years, Republican lawmakers lamented the soaring national debt, pressing for spending cuts and clinging to the mantle of fiscal responsibility. But last week, Senate Republicans hammered out a deal to allow for as much as $1.5 trillion in tax cuts, betting that supercharged growth will make up for lost revenue, a potentially dubious prospect. The tax plan outlined Wednesday by the White House and Republican leaders in the House and Senate could cost more than $2 trillion over the next decade, according to a preliminary estimate by the Committee for a Responsible Federal Budget.
At least this time, Kaplan briefly, indirectly mentioned Sen. Bernie Sanders’ budget-busting health-care proposal as well, showing that Republicans have far from cornered the market on political hypocrisy:
Republican lawmakers are pushing to increase military spending by tens of billions of dollars, topping even Mr. Trump’s request for a beefed-up military. Democrats are sharing in the fiscal intemperance, lining up behind a “Medicare for all” proposal despite having no definitive plan for how to pay for universal, government-provided health coverage.