We’ve hassled Donald Trump as much as anybody on various aspects of his economic plan. But on taxes, we’re sticking up for Trump, at least this once.
Trump has drawn fire for – well, for practically everything – but most recently for supposedly changing his story on taxes. “The wealthy are willing to pay more,” Trump said recently on ABC’s “This Week.” “Taxes for the rich will go up somewhat.”
Sacre bleu! Higher taxes on anybody is apostasy among hardcore Republicans, and Trump’s own plan entails tax cuts for mostly everybody, with nobody targeted for higher taxes. So the predictable reaction to Trump saying he expects higher taxes on the wealthy is that he’s flip-flopping now that he’s locked up the Republican presidential nomination and no longer has to appease conservative tax hawks.
The plan Trump put out last year mostly called for tax cuts, including lowering the top individual rate from 39.6% to 25% and the corporate rate from 35% to 15%. So isn't he contradicting himself? Not really. In fact, putting Trump’s remarks in context makes them seem perfectly rational. Trump was talking about negotiating his tax plan with Congress once he (gulp) becomes president. His premise seems to be that Congress won’t simply accept his entire tax plan and vote it into law unchanged. Members of Congress will ask for concessions. Maybe even Democratic members of Congress! In order for President Trump to get what he wants, he may have to give other politicians something they want, and there are a lot of Dems who want to raise taxes on those at the top of the heap.
Trump’s critics seem to be freaking out because he’s talking about the way legislating actually works, instead of presenting a fantastical non-starter in order to woo voters with simple ideas too good to be true, such as cutting taxes and sitting back as the economy magically grows at twice the normal rate.
Admittedly, such realism does sound unusual coming from Trump, the candidate who wants to force Mexico to pay for a border wall meant to pen in itself, and round up 12 million illegal immigrants as if herding a few head of cattle. But Trump is showing he actually does know something about negotiating: You start by asking for more than you expect to get, while keeping in mind the least you’re willing to accept.
You could argue that Trump has shown his hand too early, by revealing he’ll accept higher taxes on the wealthy in exchange for other priorities. But Trump’s baseline tax plan is almost laughably generous, cutting taxes so much it would add about $1 trillion per year to the national debt. Even with a corollary allowing higher taxes on the rich, Trump’s tax plan still fails the plausibility sniff test. He hasn’t exactly given away the farm.
Acknowledging he may have to agree to concessions makes the billionaire political outsider seem more realistic than his insider counterparts. It may also earn him slightly better standing with centrists and moderates. Now if only he’d do the same thing on free trade, immigration, debt reduction, unemployment, monetary policy….
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.
