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Title: Tax cuts for the middle class and an IRS return that fits on a single sheet of paper: White House unveils 'biggest tax cut in history' that kills the death and cuts corporate rate to 15%
Source:
Daily Mail Online
URL Source: http://www.dailymail.co.uk/news/art ... -tax-cuts-biggest-history.html
Published: Apr 26, 2017
Author: Francesca Chambers, White House Correspo
Post Date: 2017-04-26 14:45:19 by cranky
Keywords: None
Views: 241
The Trump administration proposed an overhaul of the tax code on Wednesday that could allow many Americans to file their annual tax returns on a single sheet of paper – and cuts their taxes, eliminating them entirely on the first $24,000 of income earned by a married couple. National Council of Economic Advisers Chairman Gary Cohn complained during a White House briefing that low- and middle-income Americans 'have been left behind by this economy' and are 'frustrated by a tax code that is so complicated they can't even do their own taxes.' 'In 1935 we had a one-page tax form consisting of 34 lines with two pages of instructions,' Cohn recalled. 'Today the basic 1040 form has 79 lines and 211 pages of instructions.' As the tax code is simplified, he boasted, 'far fewer taxpayers will need to itemize' their deductions, which means their tax form can go back, yes, to that one simple page.' Cohn said that Americans spend nearly 7 billion hours complying with tax requirements each year, and nearly 9 out of 10 of them can't file their own returns without help. OUTLINE: The White House distributed this overview of the tax plan to reporters on Wednesday. Treasury Secretary Steven Mnuchin promised 'massive reform and simplification,' while Cohn said the 'basic premise here is to simplify the tax system, lower rates, and make it easy.' 'We don't want to penalize people. We want to make the system very fair,' Cohn said. 'This isn't going to be easy,' he cautioned. 'Doing big things never is.' '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.' Overall, the Trump plan seeks a reduction in the number of income brackets, eliminates the death tax and slashes the corporate tax rate. A childcare tax credit the president's daughter Ivanka has been pushing is also on Trump's list of priorities. A document distributed by the White House on Wednesday calls for three tax brackets of 10, 25 and 35 per cent. Trump reduces the corporate tax rate to 15 per cent from 35 percent. The administration believes it will be offset by a subsequent escalation in economic growth to 3 percent or higher. '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,' Mnuchin said at a Washington D.C. conference on tax policy hosted by The Hill. Politico reported Tuesday that Trump's would include a childcare tax credit, endorsed by his daughter Ivanka, and a bipartisan proposal to pay for infrastructure spending in his priorities. Mnuchin said Wednesday that transportation principles would not be included, however. He did not comment on childcare. The inclusion of the Democratic-favored proposals was supposedly part of a White House strategy to get votes from the other side. In a televised into with The Hill, Mnuchin said the administration would begin with the principles it believes should be affirmed with legislation and go from there. 'I'm hopeful that Democrats will work with us on this,' he said. 'We're hopeful that it's bipartisan.' Trump's proposal to cut the corporate tax rate by more than half has liberals howling. 'We are all anxious to review Trump's tax plan and all the ways in which it will benefit the Trump Organization,' Democratic Rep. Maxine Waters tweeted this morning. Trump will ask lawmakers to lower the corporate rate from 35 percent down to 15 percent, outdoing his own party and blowing a potential $2.4 trillion hole in the deficit over the next 10 years. Mnuchin has issued assurances that whatever cuts the president proposes, government revenues would be protected. 'The tax plan will pay for itself with economic growth,' he proclaimed from the White House on Monday. The United States must achieve 3 percent sustained economic growth for that to happen. 'That's very achievable,' Mnuchin said Wednesday. He reminded later in the event that Trump is a billionaire. 'He understands. He's a businessman who understands how to create economic growth,' Mnuchin said. Commerce Secretary Wilbur Ross said Tuesday that it shouldn't be a problem for the economy to expand at the rate that Trump expects. 'I would hope that the growth could over time get to be better than that,' he told reporters attending the White House's daily briefing. Ross claimed, 'President Obama's the only president in many, many, many, many that didn't have one year of at least 3 percent growth. 'And with all of the initiatives that we're doing, regulatory reform, trade reform, the tax reform hopefully, and unleashing energy, there is no reason we can't get at least that if not beat it,' he said. In an early morning tweet Trump contended that the trade reforms he's pursuing would boost the country's GDP over what it was in the Obama era. 'The U.S. recorded its slowest economic growth in five years (2016). GDP up only 1.6%. Trade deficits hurt the economy very badly,' he said. Experts are skeptical of the administration's claims, though. 'The problem for the Trumpians is that we've had eight years of recovery,' Lee Branstetter, an economics professor at Carnegie Mellon University, told Business Insider at the end of February. 'It's essentially mathematically impossible to get the growth they're talking about.' Speaking on a panel after Mnuchin this morning, conservative tax analyst Grover Norquist scoffed at those assessments. 'The excuse always comes at the end of a tax and spend administration that we can't have growth. And when you change that policy, you can get growth,' the Americans for Tax Reform founder said. Maya MacGuineas of the Committee for a Responsible Federal Budget chimed in to say that she was encouraged by the moves Mnuchin has been making to boost the economy through deregulation and tax reform. 'The labor market is not going to be nearly going to be nearly as big a contributor to growth as it has been,' she said. 'That means we need as comprehensive of a plan as we can come up with to growth the economy.' In an early morning tweet Trump contended that the trade reforms he's pursuing would boost the country's GDP over what it was in the Obama era MacGuineas said the key to success is not growing the debt. 'If the plan grows the debt, that brings down your growth, and so in order to do this you also need to offset the costs,' she said. In a formal statement that came out just as Mnuchin was due to present the administration's priority list to the press, Norquist issued a statement praising it. 'The Trump administration has made it clear that spending on infrastructure will be kept separate from tax reform,' he said. 'This will allow tax reform to lower tax rates, abolish the Death Tax, and move to a territorial tax system that will allow us to compete internationally.' The corporate tax slash Trump is proposing is consistent with what he's been floating since March, but it is likely to be met with some resistance from conservatives who have argued for years that reducing the federal deficit should be a top priority of government. House Speaker Paul Ryan and Rep. Kevin Brady, the chairman of the House's tax committee, have already developed a plan that would cut rates and raise $1 trillion for the government. Known as the border-adjustment or border-adjusted tax, BAT, their plan would pay for cuts with a matching 20 percent tax on imported goods. 'There are certain things we like [about it],' Mnuchin said during a conference in Washington last week. 'There are certain things we don’t.' He said Wednesday that the administration will continue to have discussions with Republican leaders in the House about the BAT, but it won't show up in the administration's tax document today. 'We don't think it works in its current form,' Mnuchin said. Trump's tax plan will include a childcare tax credit endorsed by his daughter Ivanka and a bipartisan proposal to pay for infrastructure spending Ryan told reporters later in the morning that GOP leaders had been briefed on what Trump was going to propose 'and it's basically Along exactly the same lines of where we want to go.' 'We see this as a good thing,' he insisted. Politico said Tuesday was hoping to combine his infrastructure proposal with a tax package to make it more attractive to Democrats. That plan was apparently nixed. The childcare tax credit that Ivanka put her weight behind was also being included, the publication said. It would apply to single parents making $250,000 a year and married couples making less than $500,000 annually. That measure has a projected cost of $500 billion over the next decade, according to the Tax Foundation, and it wasn't immediately clear if or how it would would be paid for. If Trump's tax plan is similar to what he proposed on the campaign, he's looking at a $7.2 trillion revenue shortfall, according to a non-partisan tax organization run by the Brookings Institution. Another unanswered question was whether the cuts would be permanent or include a sunset, like the Bush tax cuts of 2001. 'The goal is to make it permanent, but there's lots of levers here,' Mnuchin said Wednesday. 'If we have them for 10 years, that's better than nothing, but we'd like to have permancey to it. 'Those will be details that will be worked out,' he added. White House Press Secretary Sean Spicer wouldn't say how Trump's plan is paid for on Monday - and whether that information will even be in the document that are coming out today - although the administration has suggested it is relying entirely on economic growth to offset a tax package. Responding to a question about conservative concern that Trump's tax proposal will contribute to the massive federal deficit, Spicer said, 'I'm not going to get ahead of the President’s rollout. 'The level of specificity in terms of the pay-fors and the cost, we'll have to see how comfortable the President is,' he stated. Mnuchin issued an assurance Mondayf that whatever cuts the president proposes, government revenues would not fall short. 'The tax plan will pay for itself with economic growth,' he proclaimed from the White House Trump told the Associated Press last Friday in a surprise revelation that his tax plan would be ready this week, when his first 100 days in office come to an end. 'It will be bigger, I believe, than any tax cut ever. Maybe the biggest tax cut we've ever had,' he said. Officials soon clarified that the announcement was really a set of 'broad principles and priorities,' rather than a full-fledged plan, as he had suggested. Trump's budget director, Mick Mulvaney, said he doesn't expect a meatier package to come out until June. An original August target date for tax reform legislation to get passed has also been pushed back. 'The commitment that came out of the group last night, is we want to move this as fast as we can,' Mnuchin said Wednesday of his talks with GOP lawmakers. 'We're working hard to get it done quickly.' Trump told AP in the Friday interview that his administration would be 'announcing, probably on Wednesday, tax reform.' He repeated the declaration in remarks at the Treasury Department. The president's remarks were taken to mean that comprehensive tax reform was on the way, even though he'd said earlier in the week, 'We have the concept of the plan.' 'We're going to be announcing it very soon,' he added during a speech in Wisconsin, apparently referring to an announcement about a tax structure concept, not a finished package. Spicer affirmed on Monday that the president would 'outline' his tax plan in two days. The White House official would not offer any additional details, reminding reporters that Trump and his tax team still have 48 hours to finish their discussions. 'Will we have a generally better idea of where his thinking is?' one reporter asked. Trump's spokesman said in response, 'I think you will have a better idea of where the President stands on tax reform and what he wants to accomplish. Yes.' Mnuchin told reporters from the podium just before Spicer briefed that the president's 'objectives' have been clear all along. 'Middle income tax cut - a priority of the President’s. Simplification - the average American should be able to do their taxes on a large postcard. Business tax reform - we need to make business taxes competitive, and we expect, with doing that, we will bring back trillions of dollars from offshore,' he said. To that a reporter said, 'It doesn’t sound like we’re going to get the finer details of what this tax reform package will entail. Is it a good idea to start talking about tax reform -- something that you say can’t be accomplished by August -- when you don’t have all the details?' Mnuchin carefully replied, 'There will be details that will come out. And yes, I think it is important that we’re talking about it and we are going to move forward.' He notably did promise the reporter the fine points of the plan would be released Wednesday. The details of Trump's plan could make the difference when it comes to Republican support. Ryan, a former chairman of the House Ways and Means committee, spent the last year helping to develop the border-adjustment package that cuts into the federal deficit. 'Our objective is, we will have a combined plan that come out, incorporating the principles that we've all agreed on,' Mnuchin said Wednesday. In March, Trump told Fox News' Jesse Watters, 'We're going to get a big reduction, we're going to bring business down from 15 percent to 20 percent from 36 percent and 38 percent and higher in some instances. 'We are the highest taxed nation in the world. And we are going to bring taxes way down,' Trump said. 'And for middle income, we're also getting rid of brackets. We are going from 7 to 4 or 3 brackets. And that will be such a pleasure.' At that time, Trump said Americans with limited income could see their tax burden go down to zero, however, and Mnuchin indicated Wednesday that it remains the case. 'I would like to see zero if you don’t make much. Like zero, and that's what it's going to be, it's going to be zero up to a level,' Trump said. 'Then it's going be 12.5 percent, 15 percent. It's going to be 10 percent.' Trump promised then that his tax cut would rival the one Ronald Reagan passed his first year in office, 1981. It is regarded as the largest tax cut in American history. 'It will be the biggest tax cut since Reagan and probably bigger than Reagan,' Trump pledged. 
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