GOP tax plan offers hope, but big hurdles remain
Trump administration officials and Republican leaders are set to release a long-awaited joint tax document Wednesday, which the president will promote in a speech in Indiana. The contours began to emerge on Tuesday, likely three individual tax rates ranging from 12 percent to possibly 35 percent or higher, with a near doubling of the standard deduction.
Their message: provide tax relief for the middle class, increase business competitiveness and boost economic growth.After months of starts and re-starts and the dragged-out efforts on health care, Republicans are eager to change the subject. And some kind of legislative success on taxes is now critical to show they can govern ahead of the 2018 midterm elections.
“I can’t tell you how excit[ing] this is, because this is not just a big moment for Congress, it’s a big moment for Americans,” Speaker Paul RyanPaul RyanRyan: Graham-Cassidy ‘best, last chance’ to repeal ObamaCare Ryan: Americans want to see Trump talking with Dem leaders Overnight Finance: CBO to release limited analysis of ObamaCare repeal bill | DOJ investigates Equifax stock sales | House weighs tougher rules for banks dealing with North Korea MORE (R-Wis.) said.
“It’s going to be focused on helping the people in the middle,” he said. “And it’s going to be focused on helping people get to the middle who are struggling to do that.”
Republicans have tried to prevent tax reform from suffering the same fate as health care by having Trump administration officials and congressional leaders develop consensus on key features of a plan.
Popular parts of the plan — cutting tax rates for individuals and businesses and increasing the child care credit — are the easy part.
But even before all the details are out, divisions are emerging.
For example, the plan will likely fund rate cuts in part by nixing or trimming the state and local tax deduction. That break primarily helps big Democratic states, putting Republicans from places like New York and California in an uncomfortable spot.
Taxes were a topic of discussion during House Republicans’ weekly caucus meeting, though the details of the framework will not be discussed with rank-and-file lawmakers until they attend a retreat Wednesday at the National Defense University.
Trump on Tuesday met at the White House with both Republicans and Democrats on the tax-writing House Ways and Means Committee, encouraging both parties to work together on a tax code rewrite.
“It’s time for both parties to come together and do what is right for the American people and the nation that we all love,” he said.
At the same time, the White House has been actively courting fiscally conservative outside groups, holding dinners and meetings with activists it believes will be critical in achieving tax reform.
“The next 90 days presents literally a once-in-a-generation opportunity to achieve tax reform,” said Americans for Prosperity (AFP) President Tim Phillips, who visited the White House on Monday and was also expected to go there on Tuesday.
The proposed individual rates are likely to be 12, 25 and 35 percent, based on his conversations with officials, according to an AFP spokesman. That would compare to the current seven brackets ranging from 10 percent to 39.6 percent.