It’s going to be tough for Trump to sell tax reform

  • President Trump will start making his personal push for tax reform today.
  • Both Trump and the Republicans need tax reform to succeed.
  • Trump needs to harness his communications skills – and the ear of the public – to sell it.

President Donald Trump will begin barnstorming for tax reform Wednesday with a major speech in Springfield, Missouri.

The president has his work cut out for him.

Tax reform remains the last best chance for the White House and the Republican Party to put aside their growing differences and rally around a common ideological cause. But those differences are growing and becoming nastier as President Trump continues to berate an expanding list of Republican senators — with many of them returning the fire.

Feuds or no feuds, the Trump administration has been light on legislative successes in its crucial first year so far. After the complete failure to pass any bill to reform, let alone repeal, Obamacare, this White House must prove it can make the kind of impact that only legislation through Congress can achieve. As effective as executive orders and eliminating regulations can be, sometimes new laws are the only way to make a lasting change.

Several Republican lawmakers once deemed "safe" supporters of tax reform could now bolt due to personal irritation or resentment toward Trump. Many Republicans believe that's exactly what was really behind Senator John McCain's recent decision to vote against the Obamacare repeal despite years of promising to do the opposite.

The bigger hurdles for the president go well beyond the intramural squabbles in Washington, D.C. When it comes to tax reform, or even the simple idea of tax cuts, America is not as unified as it has been in the past. In short, it will require President Trump's keenest salesmanship to explain why cutting taxes and simplifying the tax code are urgent priorities right now.

Mitt Romney was right

One of the biggest reasons why this is going to be a tough job is because of what 2012 GOP presidential nominee Mitt Romney was caught saying in that video just before Election Day. When Romney went on about how 47 percent of Americans pay no federal taxes, he may have been off by a couple of percentage points and he certainly was being politically tone deaf (he later apologized). But he had a point that the Trump team better take to heart in that almost half the country won't see any immediate impact from a federal tax cut.

And it's not just those who pay no federal taxes. The hard truth is that the American middle class is already paying very little in federal taxes these days. As I noted last month, in 2013, (the most recent year where we have a full Congressional Budget Office report), the middle quintile — those people making 10 percent above and 10 percent below the mean household income of $69,700 — paid only 4 percent of all federal income taxes. It's the rich, like the top 10 percent of income earners, who pay 71 percent of the federal income taxes.

Thus, there really can't be any significant federal tax cutting plan without benefiting richer Americans the most. And that 's where potent criticisms and shouts of "tax cuts for billionaires!" come from. Real middle class tax relief can really only come from property tax and state income tax cuts and that's not in President Trump's power to do. So that puts the president in the tough position of having to explain why he's pushing for what will amount to billions of dollars in tax savings for corporations and some very rich individuals, while all anyone can reasonably offer most middle class families is maybe a few thousand bucks back in their pockets over time.

Perhaps that's why a recent Gallup poll showed only 51 percent of Americans believe middle class people are taxed too much while a decent 40 percent say the middle class is paying their fair share. That small 11 percentage point gap is a significant change from just four years ago when 20 percentage points separated the 56 percent who thought middle class people paid too much and the 36 percent who thought they paid their fair share.

In other words, even for the most sympathetic group of tax payers out there, the massive desire for a tax cut just doesn't seem to be there. It's not that getting that additional thousand dollars or so back from Uncle Sam wouldn't be welcome, it's just clear that the president is going to have to sell this one a little harder than most of his predecessors in modern history.

That could be the reason why several reports say President Trump will try to engage the middle class by attacking tax deductions that mostly favor the rich. That would most likely mean some kind of new ceiling on the mortgage interest tax deduction, as opposed to eliminating it altogether.

The Kennedy example

Luckily for President Trump, he has a number of examples from the past to follow. The best one comes from President John F. Kennedy, who took on the heavy burden of trying to explain the need for personal and corporate tax cuts even as there was no recession and government deficits were growing. Kennedy took the shrewdest possible approach to supporting tax cuts by arguing not just that they would put more money in Americans' pockets, but that they would lead to full employment and real economic growth. Kennedy said that was how America would avoid the next recession. That's a message President Trump needs to make, too.

But he needs to remember that when President Reagan deliberately parroted Kennedy's argument in the 1980s, it was derided as "trickle down economics." But this argument fits better with President Trump's constant focus on increasing American jobs. He should make a point of repeating the Kennedy mantra that "every dollar released from taxation that is spent or invested will help create a new job and a new salary."

It also helps that those tax cuts seemed to work. Even though the major tax cuts JFK wanted didn't happen until after his death, American jobs and the economy saw major expansions until the Vietnam War spending slowed the momentum years later. Reagan's tax cuts helped produce the booming U.S. economy of the 1980s.

Make communications great again

Trump already likes to communicate directly with the public and skip the media middle man, whether it's Twitter, stadium rallies or whatever. But, instead of using these channels for self-promotion or engaging in a public spat with yet another GOP congressman, he should use these channels and his communications skills to promote tax reform and why it's good for America.

I think he missed a huge opportunity with the Obamacare repeal to publicly telegraph the benefits of repealing and replacing it.

Imagine then, the impact of a bluntly worded Trump tweet or two every day explaining that when rich people and corporations keep more of their money, they can and will use it at least partially to create jobs for middle class and poor Americans. And when tax cuts go along with more permanent tax reform that job creators can rely on, even more investment and job creation can come about as a result.

And the White House says President Trump will go beyond tweeting and that Wednesday's speech is just the first of many he will make across the country in this effort. Starting that public speaking effort in the heartland of Missouri as opposed to Wall Street is a smart move President Trump should repeat in the coming weeks.

Remember that as badly as some of President Trump's tweets and comments have hurt him, there is no denying that this may be the most listened to and quoted president of all time. He needs to start using that to his advantage to log a few victories. There's no better time to start than now — and with tax reform.

Commentary by Jake Novak, senior columnist. Follow him on Twitter @jakejakeny.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.