Each time he steps on a stage, Republican presidential nominee Donald Trump seems to flip-flop on tax policy. Most recently, Trump declared that he would “get SALT back,” referencing a once-unlimited deduction on state and local taxes that was capped at $10,000 by … Donald Trump’s Tax Cuts and Jobs Act.
Republicans like to pretend to care about fiscal responsibility, but that pretense is getting hard to maintain in the age of Trump. The tax cuts he signed only a few months into his term in 2017 blew a much larger hole in the budget than had been predicted. Extending that cut would create an explosive deficit over the next decade.
Now the top Republican and tax writer on the Senate Finance Committee has a new plan for how to deal with the havoc Trump is creating with his ongoing gifts to billionaires and nonstop campaign promises: Just ignore it.
When originally passed, the Congressional Budget Office predicted that Trump’s tax cuts, which were aimed at corporations and the wealthy, would add $1.4 trillion to the national debt during the next 10 years. But Republicans scoffed at that number, with many claiming that the cuts would pay for themselves because they would create so much economic growth.
It turns out that Republicans were right to scorn the CBO’s projections—because they were much too optimistic. The tax cuts have badly underperformed predictions about how they would stimulate the economy, raising the cost of the legislation every year. The cost of that original bill is now expected to be $4 trillion. It’s set to expire in 2025, and estimates on what it would cost to extend the bill call for another $4 to $5 trillion.
According to rules they created, Republicans are supposed to identify cuts they would make in government services to offset these costs. But Roll Call reports that Sen. Mike Crapo of Idaho has a better idea: Let’s not do that.
“If you look at history, extending current tax law has never been offset by Congress,” Crapo said. “If it’s literally not changing tax policy, I’m just telling you what the precedent that Congress has set is.”
Except it’s not. Because when that original bill was passed, it had an expiration date. Renewing that expiration date is changing tax policy, no matter how much hand-waving Crapo does.
But why shouldn’t Republicans just make up tax policy as they go along? That’s what their leader does.
As The Bulwark reports, Trump is the “Miles Davis of Tax Policy,” just riffing on whatever pops into his head in between his outreach to Hannibal Lecter fans and whatever racist BS he is using to attack immigrants on a given occasion.
But Trump’s flip-flop on SALT isn’t quite as random as it looks. The whole reason the tax deduction got capped in the 2017 bill was because Trump and Republicans wanted to punish people who live in high-tax states. That means states where the government invests in education, health care, and other costly programs that Republicans hate. In other words: blue states.
Using the tax bill to punish those living in a blue state probably generated high-fives all around the GOP. But there’s a catch: It turns out that the SALT cap primarily hurt wealthy people, because 91% of the deduction’s benefit used to go to households with incomes over $100,000, according to the nonpartisan Tax Foundation.
That means petty Republicans actually worked out a way to reach into blue states and slap the people most likely to be Republicans. Which really is kind of sweet.
However, now that Trump is being heavily funded by a cadre of tech bros, many of whom are reluctant to give up their West Coast mansions for the welcoming arms of Texas or Florida, it makes sense that Trump wants to restore a massive tax break tailored just for them. Who cares if the Tax Foundation estimates that “bringing SALT back” would cost the country an extra $1.2 trillion over the next decade?
