The left is right to fear Trump’s tax cuts
Nothing forestalls customary midterm losses like an economic boom
Liberals fear President Trump’s tax cuts more than any of his policies. This explains the left’s virulent opposition and that it will only increase as tax cuts approach enactment. The reason: Tax cuts offer Mr. Trump and Republicans greater political and economic potential than any other proposal.
Even before congressional Republicans gained procedural protections to expedite tax cuts, liberals were rabidly attacking an as-yet unveiled proposal. Not even Republicans’ months-long targeting of Obamacare elicited such reaction. While the attacks have many facets, their motivation is that tax cuts threaten liberal priorities now and over an extended time.
Liberals saw Mr. Trump as illegitimate even before his victory. His upset and resulting presidency last November only compound their perception. They gleefully foresee Mr. Trump in danger and Republicans endangered. His minority victory, low poll numbers and scarce accomplishments — all accompanied by mainstream media’s negative drumbeat — make him a prime target for midterm defeat liberals remember all too well.
The last two Democratic presidents suffered horrendous losses in their first midterms. Bill Clinton lost both House and Senate, and Barack Obama the House — despite having held large majorities. Liberals want and need their payback, inflicting a sizable congressional defeat on Mr. Trump and Republicans. However, they fear tax cuts give Republicans a roadmap to circumventing midterm defeat.
Tax cut enactment would immediately be a major accomplishment energizing — and possibly unifying — a Republican base still not fully united behind the president.
Tax cuts would offer Mr. Trump and Republicans a quick gain politically. It will be a major accomplishment by any definition — and one sorely needed in a crucial first year otherwise largely devoid of success. Enacting them now would not simply energize Republicans, it could unite them.
Cutting taxes in general is the right’s favorite policy, and tax reform in particular has been their holy grail since Ronald Reagan’s in 1986. Mr. Trump has never headed a unified party, yet he still won last November. How much better would his prospects be in 2018 and 2020 were this to happen? The political windfall to which liberals feel entitled could vanish before their eyes.
To understand why political impact of tax cuts could extend past next November, look at their potential economic effect. Liberals know the power of the economy on politics; they need only look back to Bill Clinton to remember it.
Mr. Clinton had many of Mr. Trump’s liabilities. Mr. Clinton was elected by an even smaller percentage of the popular vote, he failed in his attempt at major health care legislation (with even a bigger role in it), had heavy political baggage, and a White House plagued by miscues and poor press. Yet the economy saved Mr. Clinton, sending him to re-election.
If the economy could save Mr. Clinton, why would it not also save Mr. Trump today with arguably fewer problems? Mr. Trump does not just have a better political launching pad for a recovery than Mr. Clinton did, but a better economic one, too. The economy has underperformed for eight years with average real gross domestic product (GDP) growth of just 1.5 percent (versus 3.1 percent from 1946-2007). Even a sustained, moderate rebound will look dramatically better in comparison for Mr. Trump.
Liberals’ perception of the economy is that George W. Bush wrecked it, Barack Obama fixed it, and Donald Trump inherited it. While they will never admit that tax cuts will have fixed the economy, they recognize that the nation would reach that conclusion. It would gall them to no end to believe Mr. Trump not only waltzed into the recovery they waited eight years in vain for, but that he would get credit for it.
The combined political and economic impact of tax cuts could extend well beyond 2020, too. Liberals’ biggest threat is the longer-term economic one. Imagine the economy entering a sustained period of strong growth. Last quarter real GDP came in with a 3 percent growth rate. What if instead of being a recent aberration, this became again the norm?
Mr. Trump and Republicans get credit for it, and tax cuts would shift from a tenet of Republican orthodoxy to mainstream mantra. As bad as a twoterm Donald Trump would be for the left, a generational shift toward Republicans’ preferred policy prescription of low taxes would be far worse.
The left knows that tax cuts represent an unprecedented and multifaceted threat. Liberal attacks on tax cuts are not about to stop. Instead, they will intensify the closer tax cuts move toward reality. More clearly than Republicans themselves may realize, the left see the unique opportunity tax reform has to reshape this administration politically and economically over the near and the long-term.