President Donald Trump and congressional Republicans presented a sweeping tax overhaul proposal on Wednesday that won immediate praise from conservatives, The Hill writes.
Business groups and the far-right House Freedom Caucus both backed the GOP blueprint to slash business taxes and trim the number of individual tax rates as Republicans looked to quickly move on from another failure to repeal the health care law. The president and his congressional allies hope for a major legislative win after a year filled with losses and disappointments, most of them related to a failed effort to repeal and replace ObamaCare. Their new hope is tax reform, which on the surface at least offers plenty for Republicans to agree upon, The Hill adds.
Trump, seeming more at ease discussing tax compared to health care, said the framework “represents a once-in-a-generation opportunity to reduce taxes, rebuild our economy and restore America’s competitive edge.”
He stressed that the benefits would go to the middle class, not the wealthy, though Democrats disputed that assertion. “I’m doing the right thing, and it’s not good for me, believe me,” Trump said at an event in Indiana to sell the plan.
“This is the right tax cut and this is the right time. Democrats and Republicans in Congress should come together finally to deliver this giant win for the American people and begin a middle-class miracle.” Trump stressed.
The nine-page plan calls for three individual tax rates of 12 percent, 25 percent and 35 percent, while expressing openness to an additional rate that’s higher than 35 percent. The top rate is currently 39.6 percent.
The framework also would lower the corporate rate from 35 percent to 20 percent and would cut the rate for “pass-through” businesses whose income is taxed through the individual code, to 25 percent. It would also nearly double the standard deduction and would repeal the estate tax and the alternative minimum tax, The Hill adds.
The document was widely praised by GOP lawmakers, including the leaders of the conservative Republican Study Committee and Freedom Caucus, two groups that can act as thorns in leadership’s side. The plan also won the backing of many outside conservative groups, some of which did not get fully on board with lawmakers’ ObamaCare repeal bills, as well as business groups.
However, top Democrats still blasted the effort, arguing that it would provide a windfall to the wealthy and increase the deficit. In particular, they focused on the plan’s repeal of the estate tax, the increase in the bottom tax rate and the lower rate for pass-through businesses. Democrats also complained that they were not a part of the process of creating the tax framework. House Republicans met at a retreat at the National Defense University on Wednesday to discuss the plan, and Democrats had sought to be invited, The Hill adds.