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Trump tries to sell his tax plan as an antidote to middle-class wage pressures. Woe betide those who believe him.

Summary:
The President is jetting off to North Dakota today to sell his farblunget tax plan. This WaPo piece reveals that D Senator Heidi Heitkamp is going with him. As the article puts it: The Democratic senator is expected to face a difficult challenge for reelection next year in a state Trump carried in 2016 by 36 percentage points, one of his biggest margins of victory. So Heitkamp may see a political advantage in being friendly with Trump and open to his ideas, even if she does not ultimately vote to pass his agenda. I was impressed by the extent to which D’s held together to block the R’s attack on health care, but Trump’s guest passenger is a reminder that tax legislation has the potential to scramble that alliance. The administration’s clear play here is to try to convince people that what

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The President is jetting off to North Dakota today to sell his farblunget tax plan. This WaPo piece reveals that D Senator Heidi Heitkamp is going with him. As the article puts it:

The Democratic senator is expected to face a difficult challenge for reelection next year in a state Trump carried in 2016 by 36 percentage points, one of his biggest margins of victory. So Heitkamp may see a political advantage in being friendly with Trump and open to his ideas, even if she does not ultimately vote to pass his agenda.

I was impressed by the extent to which D’s held together to block the R’s attack on health care, but Trump’s guest passenger is a reminder that tax legislation has the potential to scramble that alliance.

The administration’s clear play here is to try to convince people that what appears to be the latest version of the standard, highly regressive Republican tax plan is actually the answer to wage and income challenges that have faced working-class people for many decades now.

For example, the Post tells us this sentence will be in the speech: “The pipe fitters and plumbers, the nurses and police officers — all the people like you who pour their hearts into every penny earned in both the offices and oil fields of America — you are the ones who carry this nation on your backs, and it is time you got the relief you deserve.”

OK, let’s see what Tax Policy Center numbers have to say about that. The TPC has patched together enough info about tax ideas floated by team Trump to run distributional tables. But they’ve also taken a useful step beyond that by looking at the impact of offsetting the costs of the tax cuts with spending cuts (I explain these tabulations here).

According to BLS data, the median plumber or pipefitter in North Dakota earns about $54,000 a year; ND registered nurses, about $60,000; police, $53,000. Assuming that’s their family income, it puts them all in the middle-fifth of the national income distribution, according to the TPC tables (average inc: $67,000).

At first blush, the Trump plan would boost their income all of 1.3%, as per the chart below, compared to over 11% for high-income households (average inc: $2.3 million). But once you factor in the payfors, assuming spending cuts hit uniformly across the income scale, the middle class, including cops, plumbers, and pipefitters, lose income, and poor families get whacked especially hard. The income of the top 1%, however, is essentially unchanged.

Trump tries to sell his tax plan as an antidote to middle-class wage pressures. Woe betide those who believe him.

My CBPP colleague and tax expert Chuck Marr often focuses on the impact of tax plans on working-class people. He told me, “During the campaign, the President focused on the stagnant wages of the working class. The problem is that his and other GOP tax plans ignore working-class people.”

In that spirit, I’ve helpfully edited Trump’s ND speech:

When it comes to Trump and co. selling this tax plan as we currently understand it to the working-class voters who supported him, the old adage comes to mind: “Fool me once, shame on you. Fool me twice, shame on me.”

Jared Bernstein
Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow. From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, Executive Director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Prior to joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute, and between 1995 and 1996, he held the post of Deputy Chief Economist at the U.S. Department of Labor.

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