Since I’ve disengaged with politics, I didn’t realize how many people were freaking out over the biggest tax overhaul in decades. If the Senate and House bills can be reconciled, it’ll mean the Federal corporate tax rate will lower from 35 to 20 percent. That’s huge, and the U.S. will be much more attractive to businesses.
It’s good for the stock market too. According to the Chicago Tribune, “Many companies plan to bring cash home from abroad and give a lot of that money to investors in the form of higher dividends and stock buybacks (which increase stock prices).”
Others have criticized the overhaul for potentially raising the national deficit and repealing the individual mandate requiring people to buy health insurance or face financial penalties. You’d think it heralds the apocalypse according to celebrities on Twitter.
So the Washington Post couldn’t help itself when President Trump seemed to equivocate on the final tax rate. According to a recent headline, “Hours after Senate GOP passes tax bill, Trump says he’ll consider raising corporate rate.”
There’s only one problem with this headline: Congress holds the purse strings. The President can’t do anything about taxes except sign or veto legislation Congress puts in front of him. This is Civics 101.
But that’s not even what happened. The entire article is based on an offhanded comment to reporters in which President Trump said, “Business tax all the way down from 35 to 20… It could be 22 when it all comes out, but it could also be 20. We’ll see what ultimately comes out.”
The President is clearly saying, “it could be 22 or 20… we’ll see what happens.” Meaning, stop freaking out about a bill that hasn’t even reached my desk yet. We don’t know what the final tax rate in the compromise bill will be. The sky could be cloudy tomorrow, or it could rain. Anything can happen.
The Washington Post interpreted this as, “Trump told reporters that the corporate tax rate in the GOP plan might end up rising to 22 percent from 20 percent,” which “could complicate sensitive negotiations to pass a final bill.” As though the President’s speculation has anything at all to do with what ends up on his desk! Sorry, our government doesn’t work that way.
You probably think this is a minor point, but the word “might” has intentionality behind it. It’s a prediction. Saying it might rain is different from saying it could rain. That turns into “Trump says he’ll consider raising corporate rate.”
Trump has no power to raise the corporate tax rate, nor did he say he’ll consider it. The Washington Post knows this, but decided to mislead its readers anyway.