Biden uses new speech to argue Trump's tax plans are a political liability

Donald Trump’s tax plans have already proven to be a hit with billionaires. Joe Biden is hoping that those same plans will be politically toxic in the states that will decide the election this fall.

That calculation was a central theme of a campaign speech Biden delivered Tuesday in the key swing state of Pennsylvania.

"He looks at the economy from Mar-a-Lago, where he and his rich friends embrace trickle-down policies that have failed the working class for more than 40 years," Biden said of Trump in the speech that was billed as a major address. Under a banner about tax fairness, Biden then added, "Donald Trump embodies that failure."

The emerging case from Biden and his campaign is that another round of Trump tax cuts for the richest Americans and corporations would explode the federal deficit even further — $5 trillion over 10 years by team Biden’s estimates.

The plans, they say, would also exacerbate inflation and be a campaign liability among voters angry that the richest Americans and corporate America aren’t paying their fair share.

"It’s indefensible on fairness grounds, but it's also bad economics," said Brian Deese, the former director of Biden’s National Economic Council, added as part of a campaign preview offered to reporters that focused almost entirely on Trump’s tax policies over Biden’s.

The speech in Scranton, Biden’s hometown, kicked off a three-day swing through Pennsylvania, with the president set to appear in Pittsburgh and Philadelphia in the coming days in a series of events where aides promise he will keep delivering his tax message.

The campaign swing also includes a stark split-screen with Trump, who is spending this week in a Manhattan courtroom as he faces criminal charges stemming from a hush-money case. Jury selection continued on Tuesday in that trial.

Biden aides link together the three issues of abortion, defending democracy, and what they describe as "tax giveaways to the very wealthy at the expense of the middle class," which they say will deliver them a win in November.

What remains to be seen is whether voters agree. Biden still faces low approval ratings, and although polls have recently shown him closing the gap, he is still trailing Trump in key swing states.

A recent survey from The New York Times and Siena College, as one example, found President Biden nearly erasing Trump’s recent polling advantage as both sides prepared for a tight race.

Contrasting policies

While the political effect of tax policy remains to be seen, Biden and Trump will offer voters a clear choice on the issue this fall.

This year's campaign comes ahead of a 2025 that is set to be consumed by tax issues. Trump’s tax cuts — formally called the Tax Cuts and Jobs Act of 2017 — include an array of provisions that expire at the end of 2025.

Much of that bill was focused on individual tax rates, and that issue will be front and center on the next president’s desk.

Trump’s plan is to extend or make permanent these tax cuts. His policy would benefit many Americans, but most of the spoils would go to the richest.

Read more: 3 ways retirees can save on taxes

Biden has said he would allow the tax cuts to expire (effectively a tax hike) for households earning more than $400,000 but would leave the lower rates in place for everybody below that threshold.

Corporate taxes are set to be another key debate, with Biden recently offering a budget that would raise the statutory rate from 21% to 28%. Trump wants it cut to 15%.

Trump’s case is that cuts would unleash economic growth and supercharge the economy, while Biden is hoping voter anger over tax cuts for rich people and booming corporate profits will be a top issue for voters and rebound to his benefit.

The president and his allies appear to be making some headway, with a Financial Times-Michigan Ross poll finding a growing 63% of survey respondents willing to blame price increases on "large corporations taking advantage."

Biden's focus on taxes on Tuesday spanned multiple issues, including the 2017 cuts as well as Trump’s plans to repeal high-income tax provisions in the Affordable Care Act.

"Trump wants to renew another round of billionaire tax breaks and corporate giveaways," Biden said in his speech, adding, "This is ridiculous what's going on now."

The contrast, Biden added, will be with his tax plans that the president cast as being focused on encouraging growth across the overall economy — specifically in the manufacturing sector — and making rich Americans pay more.

Trump’s approach

Trump has largely been focused on his legal troubles recently but still finds time to regularly tout his approach to taxes and is even floating billionaire financiers who might serve in his Cabinet.

On the campaign trail, he promises a return to the policies he championed in office, calculating voters will respond positively.

"In my first term, we built the greatest economy in the history of the world: We had record tax cuts and regulation cuts and rising wages," he said at a recent rally in Wisconsin.

The focus on cuts has also clearly struck a chord with at least some of the wealthiest Americans. A recent Trump fundraiser in Florida was populated by billionaires and — Trump's campaign says — raised $50.5 million in a single night.

"It’s clearer than ever that we have the message, the operation, and the money to propel President Trump to victory on Nov. 5," Trump campaign senior advisers Chris LaCivita and Susie Wiles said in a recent statement around that fundraiser and how they view the election playing out.

This post has been updated.

Ben Werschkul is Washington correspondent for Yahoo Finance.

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