Tax plan backed despite deficit
Republicans open to Trump overhaul that cuts corporate taxes
WASHINGTON — Republicans who slammed the growing national debt under Democrat Barack Obama said Tuesday they are open to President Donald Trump’s tax plan, even though it could add trillions of dollars to the deficit over the next decade.
Trump is scheduled to unveil the broad outlines of a tax overhaul today that includes a massive cut in the corporate income tax, reducing the top rate from 35 percent to 15 percent. The plan will also include child-care benefits, a cause promoted by Trump’s daughter, Ivanka.
Echoing the White House, Republicans on Capitol Hill argued Tuesday that tax cuts would spur economic growth, reducing or even eliminating any drop in tax revenue.
“I’m not convinced that cutting taxes is necessarily going to blow a hole in the deficit,” said Sen. Orrin Hatch, R-Utah, chairman of the Finance Committee.
“I actually believe it could stimulate the economy and get the economy moving,” Hatch added. “Now, whether 15 percent is the right figure or not, that’s a matter to be determined.”
The argument that tax cuts pay for themselves has been debunked by economists from across the political spectrum. On Tuesday, the official scorekeeper for Congress dealt the argument — and Trump’s plan — another blow.
The nonpartisan Joint Committee on Taxation said Tuesday that a big cut in corporate taxes — even if it is temporary — would add to long-term budget deficits. This is a problem for Republicans because it means they would need Democratic support in the Senate to pass a tax overhaul that significantly cuts corporate taxes.
The assessment was requested by House Speaker Paul Ryan, R-Wis., who has been pushing a new tax on imports to fund lower overall tax rates. Senate Republicans have panned the idea, and officials in the Trump administration have sent mixed signals about it.
The import tax is not expected to be part of Trump’s plan.
Trump dispatched his top lieutenants to Capitol Hill on Tuesday to discuss his plan with Republican leaders. They met for about half an hour.
Afterward, Hatch called it, “a preliminary meeting.”
“They went into some suggestions that are mere suggestions, and we’ll go from there.”
Republicans have been working under a budget maneuver that would allow them to pass a tax bill without Democratic support in the Senate — but only if it didn’t add to long-term deficits.
Democrats said they smell hypocrisy over the growing national debt, which stands at nearly $20 trillion. For decades, Republican lawmakers railed against saddling future generations with trillions in debt.