It appears that Donald Trump is braking in the public’s favor on his tax policy. He’s even flirting with raising taxes on millionaires, as well as lowering tariffs on Chinese goods. And recent statements from his office have suggested he’s amenable to having Republican legislators go higher on the rich. A shortfall of support from within the GOP could pose existential threats to his ability to make these changes. It’s important that former President Trump is taking a stand on these issues. That is a difficult position for any politician to be in — particularly one whose poll numbers on higher education have gotten slammed.
Consider this exchange from a recent interview, in which Trump hinted he might be open to Republicans trying to raise taxes on rich people. “Republicans should probably not do it, but I’m OK if they do!!!” he stated, signaling a potential shift in his traditional stance against tax hikes. This represents a major shift from his past policy, at least in practice, where he generally proposed tax cuts rather than increases.
Despite Trump’s openness to raising taxes, Republican leaders appear to be scaling back their ambitions for a comprehensive tax package. They released a set of 40 principles that included $1.5 trillion in spending reductions. The political will to actually do these things is up in the air. Furthermore, Trump’s top tax priorities may be cast aside as party leaders are forced to contend with in-fighting among members over fiscal strategy.
As the debate over taxes changes, Trump has doubled down on tariffs, especially on China. He suggested increasing tariffs on Chinese products up to 80%. He argues that these measures would have an enormous positive impact on the U.S. economy. “80% Tariff on China seems right! Up to Scott B.,” he remarked in a post on Truth Social. This aggressive pronouncement upholds his administration’s long-standing trade-harder line. These policies are aimed at offsetting what he considers to be China’s predatory practices.
Trump’s approach to tariffs coincides with his critique of closed markets, which he argues do not work in today’s global economy. He stated, “CHINA SHOULD OPEN UP ITS MARKET TO USA — WOULD BE SO GOOD FOR THEM!!! CLOSED MARKETS DON’T WORK ANYMORE!!!” His comments underscore the administration’s continued commitment to pursuing open trade relations. Yet at the same time, he holds the line on competition from foreign companies.
Amid all of this, Trump’s legacy on higher education is already a hotbed of controversy. A new poll shows that most Americans oppose his approaches to this important sector. This discontentment could start complicating the former President’s path, as he tries to retake the lead with primary voters who put a premium on disruptive policy change.
In reflecting on political history, Trump drew parallels between his current situation and that of former President George H.W. Bush, who famously declared “Read my lips: no new taxes” during his 1988 campaign only to later backtrack on that promise. Trump’s observation about Bush’s plight highlights the political risks of making a dramatic change on taxes. This is triply true in an election year.
The ramifications of Bush’s budget compromise with congressional Democrats in 1990 should sound alarm bells today. As part of this agreement they needed to raise taxes to pay for concerns over the deficit. It came back to help doom Bush’s re-election chances in 1992. Political analysts caution that Trump’s tax proposals could go the same way if they are seen as going against the grain of his central message.
Make no mistake about it—Trump is already hard at work, courting a variety of players. He similarly congratulated Russia’s President Vladimir Putin on the 80th anniversary of the defeat of Nazi Germany. Their aides helped to organize this exchange, which was filled with “warm words” and mutual congratulations. Yuri Ushakov, an aide to Putin, said that the exchange showed both leaders celebrating something in common.
Republicans find themselves at a crossroads with two primary options: cut spending or abandon their tax-cutting agenda. The present climate finds them contending with warring priorities even as they try to coalesce their party’s big tent approach to economic policy.