Trump proposes 'biggest tax cut' ever for businesses, individuals

By Allen Cone   |   April 26, 2017 at 7:05 PM
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April 26 (UPI) -- President Donald Trump is proposing the "biggest" tax cut ever, including fewer income tax brackets and lower rates, administration officials said Wednesday.

Treasury Secretary Mnuchin and White House chief economic adviser Gary Cohn summarized the plan in a briefing to reporters at the White House. They released a one-page summary.

Democrats and even some Republicans immediately criticized the plan, saying it will increase the national debt by cutting taxes without reducing spending.

"It's not tax reform," said one senior GOP aide told CNN. "Not even close."

Cohn expects difficulty in changing the tax code for the first time in 30 years.

"This isn't going to be easy. Doing big things never is," Cohn said. "We will be attacked from the left and we'll be attacked from the right, but one thing is certain: I would never, ever bet against this President. He will get this done for the American people."

Trump's plan will cut the number of individual income tax brackets from seven to three, with a top rate of 35 percent and lower rates of 25 percent and 10 percent. The income ranges under those brackets were not spelled out.

During the campaign, Trump called for brackets of 10 percent, 20 percent and 25 percent but he raised them to more closely match what House Republicans were calling for: 12 percent, 25 percent and 33 percent. The highest bracket is now 39.6 percent.

The proposal includes doubling the standard deduction to $12,600 for single filers and $25,200 for married couples filing joint. Also proposed is tax relief for child and dependent care expenses.

But other tax deductions except for the mortgage and charitable contribution deductions would be eliminated.

"We want to simplify the personal tax system, lower taxes and create economic growth," Mnuchin said at an event hosted by The Hill. "So this is going to be the biggest tax cut and the largest tax reform in the history of our country and we are committed to seeing this through."

Tax rates for businesses would drop from 35 percent to 15 percent, including corporations and owner-operated businesses known as "pass-throughs." During the campaign, Trump promised this cut.

The White House wants an unspecified "one-time tax" on the trillions of dollars held by corporations overseas.

Eliminated would be the estate tax, known as the "death tax."

The change reform is a bid to increase economic growth and allow businesses to become more competitive worldwide, Mnuchin said. But it doesn't address how to offset the reduction of income taxes as well as Trump's increased spending plans for infrastructure and defense.

Democratic National Committee Chairman Tom Perez said Trump's tax cuts and planned budget are "morally bankrupt" because they benefit the wealthy. Perez's comments were at the convention of National Action Network, a non-profit civil rights group, in New York.

Senate Minority Leader Charles Schumer of New York also was skeptical, saying the proposal would help wealthy Americans and businesses like those formerly run by Trump.

"We don't need a tax plan that allows the very rich to use pass-throughs to reduce their rates to 15 percent while average Americans are paying much more," Schumer said Wednesday on the Senate floor. "That's not tax reform. That's just a tax giveaway to the very, very wealthy that will explode the deficit."

Congress must approve changes to the tax code.

"We're committed to working, getting this thing done, getting everyone in the room and getting this thing passed," Mnuchin said.

House Speaker Paul Ryan put a positive spin on the proposal, saying "progress is being made and we're moving and getting on the same page."

Ryan issued a joint statement with Senate Majority Leader Mitch McConnell, House Ways and Means Chairman Kevin Brady and Senate Finance Committee Chairman Orrin Hatch.

"The principles outlined by the Trump Administration today will serve as critical guideposts for Congress and the administration as we work together to overhaul the American tax system and ensure middle-class families and job creators are better positioned for the 21st century economy," they said. "With an eye toward fairness and simplicity, we're confident we can rebuild our tax code in a way that will grow our economy, better promote savings and investment, provide our job creators with a competitive advantage, and bring prosperity to all Americans."

House Republicans have been developing tax reform for several months and were awaiting details on Trump's plan.

"We get that they want make a big show of leading the way on this, but that's not how this is supposed to work," one Republican legislative aide told CNN.

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