Trump, Republicans weigh surtax on wealthy
Trump urges House members to support plan at White House.
WASHINGTON — President Donald Trump and congressional Republicans are considering an income tax surcharge on the wealthy and doubling the standard tax deduction given to most Americans, with the GOP under pressure to overhaul the tax code after the collapse of its health care repeal.
On the eve of the grand rollout of the plan, details emerged on Capitol Hill on Tuesday while Trump personally appealed to House Republicans and Democrats at the White House to get behind his proposal.
“We will cut taxes tremendously for the middle class. Not just a little bit but tremendously,” Trump said as he met with members of the tax-writing House Ways and Means Committee. He predicted jobs “will be coming back in because we have a non-competitive tax structure right now and we’re going to go super competitive.”
Among the details: repeal of the tax on multimillion-dollar estates, a reduction in the corporate rate to 20 percent from 35 percent and potential reduction of tax brackets to four from the current seven. The plan would also drop the current top rate for individuals — those earning more than $418,000 a year — to 35 percent from is 39.6 percent.
To soften the appearance of the wealthiest Americans and big corporations benefiting from generous tax cuts, a new surcharge on wealthy taxpayers might be imposed.
The goal is a simpler tax code that would spur economic growth and make U.S. companies more competitive. Delivering on the top legislative goal will be crucial for Republicans intent on holding onto their majorities in next year’s midterm elections.
If approved, the plan assembled by the White House and GOP leaders would be the first major revamp of the tax system in three decades, delivering on a major Trump campaign pledge.
But Republicans already were picking at the framework, pointing up how divisions within GOP ranks can complicate its legislative efforts, as with the failed repeal of the Obama health care law.
Rep. Mark Meadows, head of the House Freedom Caucus, said he would vote against tax legislation if it provided for a corporate tax rate over 20 percent, a rate for small businesses higher than 25 percent, or if it fails to call for a doubling of the standard deduction.
The Democrats, while acknowledging the tax system should be simplified, have insisted that any tax relief should go to the middle class, not the wealthiest. Tax cuts shouldn’t add to the ballooning debt, they said.