When Donald Trump announces his plan to enact the biggest tax cut in American history tomorrow, Politico reports, the plan will have a twist: It will include a child-care tax credit and spending for infrastructure. The intention is apparently to lure Democratic support for the Trump tax cuts. Not only is this ploy bound to fail, it is so spectacularly ill-advised it suggests the administration understands even less about Congress than it seems.
Basically, everybody in the Republican Party wants to give rich people a big tax cut. If it only gets Republican votes, Congress would need to use budget reconciliation. Because reconciliation bills can’t increase the deficit after a decade, this would force them to choose between passing something that’s revenue neutral (and thus creates lots of political enemies by raising taxes on some people in order to cut them on others) or just ends after a decade. Paul Ryan has been trying to pass a revenue-neutral plan, which would cut taxes on the rich and raise them on the non-rich by imposing a border-adjustment tax. Trump, correctly, realizes that it would be impossible to pass that, given the opposition of retailers. He also wants to pass what he has called the largest tax cut in history.
But Trump may not want to pass a plan that automatically expires after a decade. If he could attract eight or more Democratic senators, he wouldn’t need to use a budget-reconciliation bill. He could just pass a huge revenue-losing tax cut with 60 votes. The infrastructure and child-care tax credits would be the bait to attract Democrats in the Senate. In an interview with the New York Times earlier this month, Trump mused that he could use infrastructure to attract Democrats to another bill where he needs votes. “I may put it in with health care …” he said. “I may put it in with something else because it’s a very popular thing … I’m thinking about putting it with another bill. Could be health care, could be something else. [Cross talk.] Could be tax reform.”
But this plan is completely insane. For one thing, Trump’s infrastructure proposal is terrible — it’s basically a proposal to create windfall profits for builders and would fail to create infrastructure that’s most needed. For another thing, the child-care tax-credit plan is also terrible — it would also confer huge windfall benefits to the affluent and do nothing to help hard-pressed families afford child care. Adding proposals Democrats will hate to another proposal they’ll hate is not going to tempt them to vote for it.
Even if Trump altered the infrastructure and child-care proposals to make them progressive and Democrat-friendly, there’s no way eight Senate Democrats would like them so much they’d go along with a massively regressive tax cut for rich people. Trump is unpopular, tax cuts for the rich are unpopular, there’s a budget deficit, and the Democratic base is going to be angry at Democrats who agree on even good things Trump supports, let alone really bad ones. Not to mention the fact that adding a bunch of spending for infrastructure and child care would alienate some conservatives in Congress.
It would be astonishing to see a Republican president with a Republican House and Senate fail to pass tax cuts. I expect he’ll ultimately get something passed, because nobody in his party is going to walk away from a tax cut for rich people, even if it’s only for ten years. But if Trump believes he can win Democratic support for this plan he may actually be incompetent enough to fail at the one thing most of us assumed all along even he could do.