Throughout the last week, the mainstream media has been attempting to paint a picture of dysfunction in the White House. According to them, Trump’s response to Charlottesville plunged his presidency to a new low, casting doubt on whether he will ever recover.
Like most media narratives, this too is greatly exaggerated.
Despite the hyperventilating over his response, polls show the majority of Americans actually agree with the president’s statements. In fact, while the media was painting a picture of doom, Trump’s approval rating actually started to tick upward.
Although reports of his administration’s demise continue to circulate, some analysts believe a major pillar of Trump’s agenda in likely to get done in the near future.
Out of the chaos has come a view about what might get done in Washington this year — and that’s corporate and individual tax legislation, according to notes from multiple Wall Street strategists.
Tax reform is not going to happen, but tax cuts are going to happen,” said Tobias Levkovich, chief equity strategist at Citigroup. Instead of slashing the corporate tax rate to the 15 or 20 percent proposed by the president and House Republicans, he said the rate might be more like 25 percent, from the current 35 percent. The average S&P 500 company pays just a little more — about a 27 percent average tax rate — but the tax cut would still be a positive for Republicans, Levkovich said.
Although not as sweeping as originally planned, the modified plan eliminates the need to pass other pieces of legislation:
That type of plan would eliminate the need to find agreement on controversial revenue-generating plans, such as the border adjustment tax. The individual tax rate may be cut a few percent, but Levkovich said Republicans will shy away from eliminating popular deductions like those for mortgage interest, charitable giving, or state and local property taxes.
To this point, House Republicans have been able to come together on many of the sweeping changes they have been promising for years. While some have attempted to distance themselves from Trump, polling shows that voters still support the president’s agenda.
With the 2018 midterms looming, the GOP would be wise to come together and notch a legislative victory. By delivering on Trump’s promise of tax cuts, they’d greatly increase their chances of holding the GOP majority.
[Note: This post was authored by Michael Lee. Follow him on Twitter @UAMichaelLee]