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The One Issue Biden and Trump Are Eager to Talk About During Their First Debate: Taxes
Most of the major issues up for debate Thursday are likely to make President Joe Biden or former President Donald Trump uneasy, but taxes could be an important exception.
Both campaigns appear to consider this a winning issue for them, based on a groundswell of expectations from both sides this week. And both are signaling plans to strike when that happens.
Trump, seeking to exploit many Americans’ antipathy to taxes, will publicize his plans for a wide variety of cuts.
“Who wants to have high taxes?” Trump asked about Biden’s plans in a recent podcast appearancelisting it among Biden’s “worst policies.”
Donald Trump speaks at the Faith and Freedom Road to Majority Conference in Washington on June 22, ahead of this week’s debate. (Andrew Leyden/NurPhoto via Getty Images). (NurPhoto via Getty Images)
Biden is expected to respond by underlining his populist stance on the issue and repeating his promise to raise taxes on large corporations and the 1%.
Trump’s plan is to give “tax cuts to the ultra-rich at the expense of the middle class,” said a pre-debate memo from Michael Tyler, communications director for the Biden campaign.
Both sides are not as eager to address other issues.
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Trump’s campaign is making it clear that the former president will return to the issues of inflation and immigration at every opportunity.
Biden, of course, will have an answer — but he may not be willing to stand by and instead try to neutralize these political vulnerabilities and move forward.
The same will likely happen with Trump when the topic turns to issues such as abortion rights and defending democracy. These are Biden’s campaign priorities, but not so much for Trump.
Will this lead to a substantive tax debate?
The broad strokes of the two candidates’ tax positions are well known ahead of a mammoth tax debate scheduled for next year, but experts note there is still much to learn.
This November’s winner will help decide the fate of a series of provisions from the Trump-era tax cuts, which are set to expire at the end of 2025.
Biden has frequently discussed his 2025 plan as focusing on renewing provisions of the 2017 cuts that affect Americans earning less than $400,000 a year, while letting provisions for the wealthy expire.
Biden also released a budget that pushes for an increase in the corporate tax rate to 28%.
Trump’s campaign’s overall message is a promise of a straight extension of the 2017 cuts and perhaps more reductions.
Trump too launched a series of tax ideas during a recent visit to Washington, including cutting the corporate tax rate to 20% from its current level of 21%, as well as a distant idea of scrapping the entire US income tax system in favor of higher tariffs.
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But for all the noise surrounding the issue, “we haven’t seen a lot of detail about each side’s holistic view of tax policy,” said Garrett Watson, senior political analyst at the Tax Foundation.
He noted that, with a few exceptions, there has so far been a lack of “estimates or details about how this would work.”
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President Joe Biden salutes before boarding Air Force One in Delaware on June 20, where he will prepare for the upcoming presidential debate. (AP Photo/Susan Walsh) (ASSOCIATED PRESS)
The unanswered questions are numerous, ranging from the specifics of their positions on certain taxes, such as state and local tax (SALT) deductions, research and development credits, and the earned income tax credit.
And both sides — but Trump in particular — have math problems that could be explored in a debate setting.
Trump’s plan to simply extend expired provisions of the 2017 Tax Cuts and Jobs Act could add $4 trillion to $5 trillion to deficits over the next decade unless cost savings can be found elsewhere. Trump has not released anything close to a detailed plan on this.
Biden also promised to extend any tax cuts for Americans earning less than $400,000 a year, which the Tax Foundation estimates would cost about $2.5 trillion over the next decade.
Biden could pay for this with his proposed tax increases on the richest Americans and largest corporations, but he has also discussed using that money for other priorities.
Who is a winning question for?
The unique dynamic around taxes is that both sides clearly think they have the higher ground.
Biden raises the issue regularly, as he did recently before a well-heeled audience that gathered to donate to his campaign.
“The trickle-down economic system didn’t really work,” Biden told the audience at a recent fundraising stop in Virginia, adding that “if we just raise the minimum billionaire tax to 25%, we will raise $500 billion over the next 10 years.”
A banner is seen outside the CNN studios before the first presidential debate in Atlanta, Georgia on June 24. (CHRISTIAN MONTERROSA/AFP via Getty Images) (CHRISTIAN MONTERROSA via Getty Images)
Bilal Baydoun, director of policy and research at the left-leaning organization Groundwork Collaborative, said in an interview that the focus on the issue is because “people no longer believe” the arguments in favor of cutting taxes to grow the economy or of trickle-down economics.
But the strength of conviction is equally strong on the other side. Trump brings this up in front of crowds and behind closed doors.
“I cut your taxes,” he said at a recent rally in Wisconsin to applause, quickly adding a false claim that they were the largest tax cuts in U.S. history and promising to make them permanent.
Polls have shown that both campaigns are partly right about how they think about this issue; the success of their message often depends on how it is framed.
A left-wing group called Blueprint 2024 took a deep dive into the issue in April and came to the conclusion that tax cuts represent Trump’s “greatest vulnerability.”
That poll found that Trump’s 2017 tax cuts remain unpopular and that Biden’s message of raising taxes on the wealthy is “a high-performing message” that resonated with both Democratic and moderate supporters.
Media polls on taxes have painted a more nuanced picture.
A CNBC poll from March I found a split in the topicwith Biden enjoying a 35-point lead on the question of “what companies pay in taxes” but Trump enjoying a 32-point lead on “what you pay in taxes.”
Anyway, a Harvard-Harris survey in May found that taxes are gaining traction as an election year issue, rising 5% from April, but still lagging behind key issues like inflation, immigration and the broader economy.
Ben Werschkul is the Washington correspondent for Yahoo Finance.
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