Trump’s new tax plan would hit the rich the hardest
The White House unveiled a sweeping new tax reform plan Wednesday that would dramatically cut the corporate tax rate, simplify the code, and expand the base for deductions and credits.
It’s an ambitious agenda that includes slashing taxes for millions of Americans and will likely be greeted by much less resistance from Republican lawmakers than President Donald Trump’s first attempt at overhauling the nation’s tax code.
In a press conference following the bill’s release, White House press secretary Sarah Sanders defended the plan’s major changes, including eliminating a tax on investments in the financial sector, which Trump and his advisers have argued could spur the economy.
“The American people want the best tax reform they can get,” Sanders said.
“And this is a good tax reform.
And the American people are going to get it.
So let’s get it.”
A Tax Reform Working Group report found that, by 2021, the top 0.1 percent of Americans would pay an average of almost $4,000 more than they do now.
“This tax reform package delivers a substantial tax cut for the middle class, and the wealthiest Americans,” Sanders continued.
“By 2021, taxpayers will see their taxes go down, and in 2021, when you’re paying taxes at a lower rate than you do now, you’re going to see a big jump in your paychecks.”
Sanders said the plan would “expand the base” for tax credits, which are currently capped at $3,000 for the typical family of four.
“It will help lower the rate that people pay on the mortgage and on other debt,” she said.
Sanders cited the Joint Committee on Taxation’s 2017 analysis of Trump’s proposed tax plan, which found that the plan could reduce the overall deficit by as much as $4 trillion over 10 years, and Sanders called it a “historic step forward.”
But while Sanders argued the plan was a “major step forward,” she also noted that the legislation would not include all of Trump and House Speaker Paul Ryan’s signature policies that were designed to make the corporate and personal tax systems fairer.
Sanders said she would not reveal details of the bill before the Senate takes it up for a vote next week.
Trump and Ryan are expected to unveil a major tax reform bill in the coming weeks.
The Trump administration has previously signaled it is open to negotiating a deal with Democrats.
But it has said it needs more time to assess the legislation and has repeatedly insisted that the tax reform proposal should be revenue neutral, with the goal of cutting the deficit.
The new legislation would be paid for through sweeping tax cuts that are expected, along with other reforms, to bring down the corporate rate from 35 percent to 20 percent and eliminate the alternative minimum tax.
The legislation would also lower the standard deduction to $6,500 from $12,500 and the mortgage interest deduction to two percent from three percent.
“These tax cuts and other reforms would not only reduce the deficit, but they would also make the economy more competitive, making the American middle class more prosperous and the middle-class a little bit richer,” Sanders explained.
“There’s a lot of tax reform that will help grow our economy, but the American public doesn’t want a huge tax increase.
So this is the plan that the American taxpayers deserve.”
But Trump’s team is under pressure to include more details of its tax plan.
Democratic senators have already introduced legislation to repeal the Alternative Minimum Tax and other controversial provisions of the tax bill, and a Republican senator on Wednesday called on Democrats to put forward a plan that would be revenue-neutral.
“We don’t need more taxes,” Senate Majority Leader Mitch McConnell (R-KY) said in a statement on Wednesday.
“In fact, we need less taxes.”
In his press conference Wednesday, Sanders insisted the administration’s tax reform is revenue neutral.
“All of this tax reform, we’re not talking about a tax cut.
We’re not even talking about reducing the top tax rate.
We are talking about lowering the tax rates on the middle and upper classes,” Sanders declared.
“If the American taxpayer has to pay more, that’s what we’re going see in this tax plan.”
Aides to Sanders also defended the proposal’s corporate tax cuts, which were initially intended to benefit large multinational corporations, and said that the president has made no secret of the fact that the proposal includes a significant number of corporate tax breaks that would benefit small businesses.
“Our tax code is a tax code that works for middle-income people and working families, but we are not going to change that,” Sanders insisted.
So I think the president wants to put the focus on the American families and their tax bills. And that’s