Trump plans no rate hikes for wealthy in tax over­haul plan.

Mid­dle class are pri­or­ity, will be big win­ners af­ter plan passes, he says


Pres­i­dent Trump said Thurs­day he doubts he’ll have to hike tax rates for the rich in or­der to get a tax over­haul through Congress, di­al­ing back his com­ments a day ear­lier that the wealthy could end up pay­ing more un­der his plan.

But he kept ham­mer­ing home the mes­sage that the big win­ners will be the mid­dle class.

“The wealthy Amer­i­cans are not my pri­or­ity. My pri­or­ity are peo­ple in the mid­dle class and that’s where we are giv­ing the big tax re­duc­tion,” the pres­i­dent told re­porters at an air­port in Fort My­ers, Florida, as he headed to sur­vey hur­ri­cane dam­age.

Mr. Trump is try­ing to dent Democrats’ chief ar­gu­ment against the GOP’s tax plans, say­ing that while the poor and mid­dle class should see breaks, the wealthy should — if any­thing — pay more, in or­der to keep the gov­ern­ment run­ning.

At a White House meet­ing with Democrats and Repub­li­cans on Wed­nes­day, the pres­i­dent said: “The rich will not be gain­ing at all with this plan ... If they have to go higher, they’ll go higher, frankly.”

Repub­li­can con­gres­sional lead­ers want to see tax breaks across the board, ar­gu­ing that’s the only way to make sure busi­nesses and pri­vate in­vest­ment get a boost.

“What the pres­i­dent is say­ing when he says this isn’t about the rich — that’s true,” said Grover Norquist, pres­i­dent of Amer­i­cans for Tax Re­form and a close ally of the White House on the is­sue. “This is about job cre­ation — it’s about ev­ery­body.”

But polls show that Mr. Trump, the wealth­i­est pres­i­dent in mod­ern times, could be vul­ner­a­ble to the Democrats’ class war­fare rhetoric.

“Trump re­al­izes he has to frame the de­bate and take away a lot of the Democrats’ mes­sag­ing game and this is ex­actly what he’s do­ing,” said Repub­li­can strate­gist Ford O’Con­nell. “He’s tak­ing a dag­ger to the Democrats’ mes­sag­ing even be­fore it gets out of the gate.”

Mr. Trump’s mixed sig­nals have not de­railed the tax over­haul ef­fort, with con­gres­sional Repub­li­cans promis­ing a frame­work will be re­leased soon de­tail­ing the di­rec­tion they want to go.

But what­ever they re­lease will now be com­pared to the pres­i­dent’s yard­stick.

“I can tell you one thing,” said Se­nate Mi­nor­ity Leader Charles E. Schumer. “If the pres­i­dent’s tax plan re­peals or rolls back the es­tate tax, it’ll be clear that a lot of his plan ben­e­fits the very rich, con­trary to all his words.”

Mr. Schumer, who talked taxes with Mr. Trump at a White House din­ner this week, said the pres­i­dent’s top eco­nomic ad­viser, Gary Cohn, has claimed that no­body ac­tu­ally pays the es­tate tax.

“What they mean of course, is that peo­ple rich enough to be levied es­tate taxes can find ways around pay­ing them — they can af­ford all of those lawyers and es­tate plan­ners,” he said.

Democrats have fo­cused on the top 1 per­cent, those mak­ing more than $389,000 a year, who also pay about half of all U.S. in­come tax rev­enues. Mr. Trump hasn’t said what he con­sid­ers the cut­off for the wealthy.

Tax-cut­ters say that the wealthy have to be in­cluded in any new breaks, or else it will be im­pos­si­ble to square with the goal of low­er­ing the cor­po­rate tax rate. Most small busi­nesses pay taxes as pass-through cor­po­ra­tions, un­der the in­di­vid­ual in­come tax code.

But Sen. Ron Wy­den, the top Demo­crat on the Fi­nance Com­mit­tee, de­scribed the spe­cial rate for small busi­ness as a “lu­nar crater-sized loophole” for the wealthy to ex­ploit.

Trea­sury Sec­re­tary Steven Mnuchin said the wealthy wouldn’t get a net ben­e­fit be­cause any low­er­ing of rates would be off­set by de­duc­tions that would also be elim­i­nated.

“Even if we do end up with a slight re­duc­tion on the high end, that will be off­set by a re­duc­tion of de­duc­tions so that their taxes won’t go down,” Mr. Mnuchin said at an event Thurs­day hosted by Politico.

Sen. Or­rin G. Hatch, chair­man of the Se­nate Fi­nance Com­mit­tee, said many of the pro­pos­als be­ing dis­cussed, like an ex­panded stan­dard de­duc­tion, would be a boon for the mid­dle class.

“While I can’t see into the hearts of ev­ery mem­ber of the Congress, I truly don’t know of a sin­gle Repub­li­can who, when think­ing about tax re­form, asks them­selves what they can do to help rich peo­ple,” he said at a hear­ing his com­mit­tee con­vened on the sub­ject Thurs­day. “That has never been our fo­cus, and it is not our fo­cus now.”

But Sen. Pat Toomey, Penn­syl­va­nia Repub­li­can, said law­mak­ers shouldn’t feel like they need to ex­clude pro­duc­tive, suc­cess­ful peo­ple who pay a dis­pro­por­tion­ate share of the taxes in the coun­try.

“In my view, we ought to have a very pro-growth tax code that’s go­ing to en­cour­age an eco­nomic ex­pan­sion, and if along the way a rel­a­tively wealthy per­son man­ages to ben­e­fit from that, I for one am not go­ing to lose any sleep at all,” Mr. Toomey said at the hear­ing.


“The wealthy Amer­i­cans are not my pri­or­ity. My pri­or­ity are peo­ple in the mid­dle class and that’s where we are giv­ing the big tax re­duc­tion,” Pres­i­dent Trump said. He di­aled back his com­ments a day ear­lier about wealthy peo­ple pay­ing more un­der his plan.

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