WASHINGTON – President Donald Trump vowed to deliver on a major tax cut for middle-class Americans on Tuesday as the White House and congressional leaders prepared to release details on a tax overhaul proposal that would slash the corporate rate and simplify the nation’s tax code.
Trump met with Republicans and Democrats from the tax-writing House Ways and Means Committee at the White House, telling reporters he would be releasing a “very comprehensive, very detailed report” on Wednesday that would offer the framework for his top legislative agenda.
“We will cut taxes tremendously for the middle-class. Not just a little bit but tremendously,” Trump said. He predicted jobs “will be coming back in because we have a non-competitive tax structure right now and we’re going to go super competitive.”
— The Hill (@thehill) September 26, 2017
The president and congressional leaders were putting the final touches on plans for the first major overhaul to the tax system in three decades, a major Trump campaign pledge that the White House hopes will give Trump a sorely needed legislative achievement.
The plan would likely cut the tax rate for the wealthiest U.S. citizens, now at 39.6 percent, to 35 percent, said people familiar with the plan. They spoke on condition of anonymity ahead of a formal announcement.
In addition, the top tax for corporations would be reduced to around 20 percent from the current 35 percent, they said. It will seek to simplify the tax system by reducing the number of income tax brackets from seven to three.
Trump has said he wanted a 15 percent rate for corporations, but House Speaker Paul Ryan has called that impractically low and has said it would risk adding to the soaring $20 trillion national debt. The president said they would be announcing the specific rates on Wednesday.
Trump said some of the components included doubling the standard deduction used by families and increasing the child care tax credit. He said the majority of U.S. citizens would be able to file their taxes on a single page. “We must make our tax code simple and fair. It’s too complicated,” Trump said.
— Bloomberg (@business) September 26, 2017
He sat with several members of the House Ways and Means Committee, including its chairman, Rep. Kevin Brady, Republican from Texas, and the committee’s top Democrat, Rep. Richard Neal of Massachusetts.
Vice President Mike Pence, Treasury Secretary Steve Mnuchin and White House economic adviser Gary Cohn also attended the meeting. All three are expected to play a major role in the administration’s push to overhaul the system.
The White House and congressional leaders are planning an all-out blitz later this week to build support for the plan, which comes as the GOP has struggled to repeal and replace Democrat Barack Obama’s health care law. The political stakes are high for Trump, who has promised to bring 3 percent economic growth and expanded jobs through tax cuts.
Trump will be in Indianapolis on Wednesday to promote the tax framework and Pence was expected to hold events in Michigan and Wisconsin on Thursday with business leaders.
Cabinet members and other top administration officials were fanning out on Thursday to talk about the benefits of overhauling the tax system.
The plan being assembled lays out “pro-growth tax reform,” Brady told reporters on Capitol Hill. It will fix a tax code that is “so complex, so costly and so unfair,” he said. Brady predicted the plan “will deliver the lowest tax rates on businesses in modern history.”
Details will be filled in later by the committee, and legislation will be put forward after the House and Senate enact their budget frameworks, Brady said.
Republicans are divided over the potential elimination of some of the deductions, underscoring the difficulty of overhauling the tax code even with GOP control of the House and Senate.
House Republicans planned to hold a retreat Wednesday at Fort McNair in Washington, D.C., a few miles from the White House, to discuss the proposal, with briefings led by Brady and Rep. Peter Roskam, Republican from Illinois.
Touching with his conservative base, Trump discussed the tax plan at dinner Monday night with representatives of several conservative, religious and anti-abortion groups. Outside Republican groups and business interests are also planning a major push to advocate for the tax framework.
— Bloomberg (@business) September 26, 2017
Corry Bliss, the executive director of the American Action Network, a conservative advocacy group, said it planned to spend $12 million — atop the $8 million it spent laying the groundwork for the tax overhaul — to help win passage of the plan.
“There’s an understanding among outside groups, among members, among Republicans across the country that there is a desperate need to cut middle-class taxes,” Bliss said, noting “excitement and relief” among outside groups that it was “finally time” to push the tax package in Congress.
Republicans control Congress but they are split on some core tax issues. They’re in agreement on wanting to cut tax rates and simplify the byzantine tax system but they’re divided over whether to add to the government’s ballooning debt with tax cuts. The GOP also is at odds over eliminating the federal deduction for state and local taxes.