President Donald Trump tweeted Wednesday morning, hours before the announcement of the latest Republican tax proposal, that “virtually no President has accomplished what we have accomplished in the first 9 months.”
This is probably a good time to reflect on George W. Bush.
While Trump likes to talk about “massive tax cuts,” Bush actually signed one less than five months into his term in office. Bush’s proposal was popular and attracted substantial Democratic support. And much of it is still the law today.
Bush understood the politics of tax cuts in a way that Trump and House Speaker Paul Ryan do not — which is why Ryan and Trump have produced a tax plan that is a political time bomb.
This plan will soon blow up in their faces.
Tax cuts are more popular if they don’t increase taxes on people
A key talking point the Bush administration used repeatedly to sell their tax plan was that it would “reduce taxes on everyone who pays income taxes.”
This statement was right there in the first paragraph of Treasury Department’s announcement of the tax proposal — which, I would note, was released in February of Bush’s first year in office, not September.
Most importantly, the statement was true.
You know the 10% income tax bracket that Republicans now want to abolish, increasing the lowest income tax rate to 12%? That income tax bracket was created in the 2001 Bush tax cuts.
“To provide a greater reward for those who make the sacrifices needed to move ahead, the President’s tax cut plan will substantially lower the marginal tax rate for low-income parents,” Bush’s team explained at the time.
Bush’s proposal also called for doubling the per-child tax credit, significantly increasing tax benefits for families with children. Congress agreed to this, which is how we got the $1,000 per-child tax credit we have today.
Of course, the Bush tax proposal also included big benefits for high earners. He wanted to cut the top income tax rate to 33% from 39.6%. (He later compromised with Congress and settled on 35%.) He also wanted to repeal the estate tax, which the bill he signed did, if only for one year.
But the proposal was explicitly designed to have extensive benefits for middle-income families, so he could go around the country and accurately say it offered a tax cut for everyone who paid income taxes and that nobody’s income taxes would go up.