What Trump isn’t say­ing on tax plan: Some will pay more

The Commercial Appeal - - Front Page -

Pres­i­dent Don­ald Trump leaves lit­tle doubt about how great his tax over­haul is going to be when he is in front of crowds, urg­ing them to pres­sure Con­gress to pass it.

But what the pres­i­dent does not men­tion is that some peo­ple — one study said 1 in 5 peo­ple mak­ing be­tween $86,100 and $149,400 — will end up pay­ing more. The chal­lenge Con­gress faces in pass­ing the tax pack­age is get­ting law­mak­ers whose con­stituents would pay more to vote for it.

Right now, Trump’s ad­vis­ers and his sup­port­ers in Con­gress are work­ing to down­play any men­tion of pay­ing more, even though that is an in­evitable part of the kind of over­haul they are plan­ning, which in­volves elim­i­nat­ing de­duc­tions and cred­its to pro­duce lower rates over­all.

Any tax bill is a trade­off: It needs to raise taxes in some ar­eas to gen­er­ate rev­enue to off­set the tax cuts that re­duce the gov­ern­ment’s rev­enue.

“If you are a tax writer on the Hill, the pres­i­dent’s rhetoric must drive you crazy, be­cause you know you can’t write a tax bill that lives up to that,” said Robert Bixby, ex­ec­u­tive direc­tor of the Concord Coali­tion, a non­profit that cru­sades against in­creased debt.

“I don’t think we can have the Oprah tax re­form, this idea of, ‘Ev­ery­body gets a car, the keys are un­der the seat,’ ” Bixby said.

Maya MacGuineas, pres­i­dent of the Com­mit­tee for a Re­spon­si­ble Fed­eral Bud­get, said de­liv­er­ing tax cuts for ev­ery­one would work only if there is a big bud­get sur­plus and low debt.

“That’s the op­po­site of the fis­cal en­vi­ron­ment they have now,” she said.

Sup­port­ers of the tax pack­age have gone from say­ing lower rates would be fully off­set by cut­ting de­duc­tions and cred­its to say­ing it would be off­set by fu­ture eco­nomic growth, a stance that MacGuineas and Bixby said is un­sup­port­able and could de­rail pas­sage.

“Un­less it re­duces deficits ... with rea­son­able and re­spon­si­ble growth mod­els, and un­less we can make it per­ma­nent, I don’t have any in­ter­est in it,” Sen. Bob Corker, R-Tenn., said last week.

Us­ing data from ear­lier plans out­lined by House Repub­li­cans to fill in some of the blanks in Trump’s plan, the non­par­ti­san Tax Pol­icy Cen­ter es­ti­mated that 13.5per­cent of tax­pay­ers who earn be­tween $48,600 and $86,100 would see a tax in­crease, av­er­ag­ing $1,000.

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