December 16 2017

Trump promising huge tax cut; focus on taxes vs health care

December 16 2017, 03:07 | Clarence Walton

California State Capitol

California State Capitol

Early Monday morning, he tweeted that he has "important meetings taking place today".

The estate tax, which Republicans call the "death tax", is a tax on assets left to heirs by people when they die.

Touching with his conservative base, Trump planned to discuss the tax plan at dinner Monday night with representatives of several conservative, religious and anti-abortion groups.

While details of the framework may be in flux, a list of specifics that's circulating among Washington lobbyists breaks from the president's recent rhetoric against tax cuts for the rich.

Democratic leadership has drawn at least one line in the sand, arguing that reform can not simply be a cover for giving more to the wealthiest.

Two Republicans familiar with the plan expect the top income rate will drop to 35% from 39.6%, and the top corporate rate will drop to 20% from 35%. The state tax exemption, which mostly hits blue states, is a ideal example.

Republican leaders working on a tax reform bill have agreed to increase the lowest personal income tax rate from 10 percent to 12 percent; this bracket now covers the first $18,650 in taxable income (after deductions and exemptions) for a married couple, and the first $9,325 for single people.

The poll, sponsored by a nonprofit outside group aligned with House Speaker Paul Ryan, found that almost three-fourths of voters consider tax reform an important priority for lawmakers, with 43 percent calling it a top priority. Trump's tax cut plan was as clearly stated and as often repeated in 2016 as George Bush was in 2000 and Reagan was in 1980. The upcoming framework will give Congress the latitude to create a fourth income tax bracket for the highest earners that carries a tax rate of over 35 percent.

Trump emphasized the benefits for lower earners Sunday.

The rate is "going to be substantially lower so we bring jobs back into our country", Trump said. But it's going to be substantially lower so we bring jobs back into our country'. Actually, the lowest income-tax bracket in 2017 applies a 10 percent rate to taxable income of $9,325 or less.

Trump's preferential rate for business income is unprecedented. Trump has proposed cutting that to 35 percent; House Republican leaders want to cut it to 33 percent.

The latest plan in many ways meets the tax rate levels set by House Republicans months ago, although they would have raised an additional $1 trillion by charging higher taxes on certain imports.

Attempts to end it may run into Republican opposition too. Reagan's across the board 25 percent tax rate reduction was signed at the Western White House on August 13, 1981.

It should be easy to cut taxes with a Republican House, a Republican Senate and Donald Trump elected both as a Republican and as the candidate of pro-growth tax cuts. "Poll after poll shows that a strong majority of Americans widely support fixing our broken tax system and lowering tax rates for working families".

House Ways and Means Committee Chairman Kevin Brady, R-Texas, dismissed worries about adding to the deficit, telling reporters on Tuesday that Republicans will balance the budget "over time" with "accurately measured economic growth" along with eliminating loopholes and deductions.

"We can live with it", Rep. Dave Brat, R-Va., a member of the conservative House Freedom Caucus said of an estimated hit to the deficit. Just 10 percent think it will mainly help the middle class. This enables those who whose goal is to shrink government to point to deficits and debt as their proof that we can't afford it, whatever "it" is, except when "it" is tax cuts. Nor will his panel be a "rubber stamp" for any particular plan, Hatch said.

"It's time for both parties to come together and do what is right for the American people", he concluded.

"We want the top rate to stay at 39.6%", Neal said.

When it comes to individual rates, Trump has proposed a 10 percent floor. It is paid by very few Americans because it now applies only to inheritances exceeding $5.49 million per person.

"Democrats are now more positive toward their party (89% favorable) than Republicans are toward theirs (80%)". But the tax plan has been developed in private with Treasury Secretary Steve Mnuchin, White House economic adviser Gary Cohen, House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell and the two Republicans leading the major tax-writing committees — Sen. Though proponents say tax cuts would stimulate growth to make up for the shortfall, a budget that allows for deficit-increasing tax cuts would depart from years of GOP support for balanced budgets. "In short, if you were hoping for tax reform from this government, all I can say is don't hold your breath".

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