The president’s broken promise to deliver big tax cuts to the poor and middle class was a major victory for his populist base, but the Republican tax overhaul was widely unpopular with both the public and Democrats.
Now, the president’s failure to deliver on that promise could cost him the popular vote and give him a crushing loss in November.
Here are some of the major political consequences: * Trump’s first 100-day legislative blitz has backfiled on a promise to slash the top rate of federal income tax from 39.6% to 28%.
He has said he would sign the bill into law if it is passed.
However, a White House official said Thursday that Trump would instead push for a 10% rate cut for businesses, a top priority of many of his GOP congressional allies.
*The White House is scrambling to find new ways to pay for the tax cuts.
The Trump administration is working to figure out how to offset the loss of revenue from the bill by reducing the child tax credit, which is expected to raise $3.5 trillion over the next decade, and by offering more help to workers who are currently struggling.
*Trump has said the tax bill will lower taxes on people earning more than $200,000 a year, and Republicans have promised to cut taxes for middle-class Americans.
However for the first time in his presidency, Trump has offered no details on how he plans to pay off the $4.5 billion in tax breaks the White House claims to have received in exchange for agreeing to the bill.
Trump is expected soon to unveil details on his tax plan, but aides have not offered details on what it will look like.
*Republicans in the House and Senate have promised that their tax legislation will be a boon to the economy.
However with Trump and House Speaker Paul Ryan promising that the bill would benefit the wealthy, the House bill has become a boon for the poor, with many people who have been hit hardest by the recession finding themselves worse off under the tax plan.
Republicans have also promised to pay a $2,000 tax credit to families making less than $250,000 annually.
In addition, they have promised a $3,000 credit for individuals making less $200 of income.
*But some analysts say the tax overhaul will disproportionately benefit the rich and that it will be even more regressive in the coming years.
For example, the Congressional Budget Office predicts that the tax cut for the wealthy will cost them more in the long run, and they are more likely to take the tax credit than lower-income people.
And they also predict that the number of people on food stamps will increase under the bill, which would disproportionately impact the poor.
*GOP lawmakers are also expected to take aim at some other provisions in the bill to increase the deficit and to cut spending.
They are expected to increase a provision that would allow the administration to extend a tax deduction for mortgage interest payments and a provision to allow states to opt out of a requirement that insurance plans provide maternity coverage for employees.
The House GOP leadership is expected next week to offer a bill to Congress that would repeal the estate tax, which applies only to estates worth more than about $5.25 million.
*While the tax reform is expected not to produce the big economic growth the White Hill officials have promised, the economic impact could be significant, said Michael Biederman, senior fellow at the Brookings Institution.
The tax reform could lead to a substantial rise in economic growth in the short term, but could also lead to the recession that the administration has long warned about.