Trump un­likely to tell many tax de­tails

The pres­i­dent’s ‘big an­nounce­ment’ is expected to of­fer only gen­eral re­form ideas.

Los Angeles Times - - BUSINESS - By Jim Puz­zanghera

Pres­i­dent Trump promised a “big an­nounce­ment” this week on one of his sig­na­ture is­sues — tax re­form.

But if you’re look­ing for all the long-awaited de­tails of his promised “mas­sive tax cut” for busi­nesses and in­di­vid­u­als, you’ll have to wait awhile longer.

The White House now says that Trump sim­ply “will be out­lin­ing prin­ci­ples for tax re­form” dur­ing his much-bal­ly­hooed Wed­nes­day event.

That’s a far cry from what Trump promised last week.

“We’ll be hav­ing a big an­nounce­ment on Wed­nes­day hav­ing to do with tax re­form,” Trump said dur­ing a speech at the Trea­sury Depart­ment on Fri­day.

“The process has be­gun long ago, but it will for­mally begin on Wed­nes­day,” he said.

Ear­lier on Fri­day, the told the As­so­ci­ated Press in an in­ter­view that “I shouldn’t tell you this, but we’re go­ing to be an­nounc­ing, prob­a­bly on Wed­nes­day, tax re­form.”

He pro­vided no new de­tails then, but said: “It will be big­ger, I be­lieve, than any tax cut ever. Maybe the big­gest tax cut we’ve ever had.”

Trump took to Twit­ter on Satur­day to again tout that “Big tax re­form and tax re­duc­tion will be an­nounced next Wed­nes­day.”

But on Sun­day, Mick Mul­vaney, di­rec­tor of the White House Of­fice of Man-

‘I don’t think any­body ex­pects us to roll out bill lan­guage on Wed­nes­day. In fact, we don’t want to do that.’ — Mick Mul­vaney, di­rec­tor of the White House Of­fice of Man­age­ment and Bud­get

age­ment and Bud­get, down­played what was com­ing this week.

“I think what you’re go­ing to see on Wed­nes­day is some spe­cific gov­ern­ing prin­ci­ples, some guid­ance,” he said on “Fox News Sun­day.”

“Also some in­di­ca­tion of what the rates are go­ing to be,” Mul­vaney said. “I don’t think you’re go­ing to see some­thing and I don’t think any­body ex­pects us to roll out bill lan­guage on Wed­nes­day. In fact, we don’t want to do that.”

De­tails will be lim­ited to “here are some of the ideas that we like, some of the ideas we don’t like .... here are some of the rates we’re talk­ing about,” Mul­vaney said.

A White House spokes­woman on Mon­day said there would be “no fur­ther com­ment be­yond what the pres­i­dent has said on this.”

Trump out­lined his prin­ci­ples and pro­posed rates dur­ing the cam­paign. He said he wanted to lower the cor­po­rate tax rate to 15% from 35%. And Trump said he wanted to re­duce the seven in­di­vid­ual tax brack­ets to four, with the high­est rate drop­ping to 25% from 39.6%.

But House Repub­li­cans are work­ing on their own plan that has smaller tax cuts.

The House plan also would elim­i­nate all per­sonal de­duc­tions ex­cept for mort­gage in­ter­est and char­i­ta­ble con­tri­bu­tions. Among the de­duc­tions to be elim­i­nated would be the one for the pay­ment of state and lo­cal taxes, which would be a big hit to Californians and res­i­dents of other states with high taxes and high earn­ers.

Trump’s cam­paign tax pro­posal kept the state and lo­cal tax de­duc­tion but capped item­ized de­duc­tions at $100,000 for sin­gle fil­ers and $200,000 for mar­ried cou­ples fil­ing jointly.

The House Repub­li­can plan in­cludes a con­tro­ver­sial bor­der ad­just­ment tax, which Trump hasn’t yet taken a po­si­tion on.

Trump also promised his tax over­haul would be “rev­enue-neu­tral,” mean­ing the cuts would be off­set by the elim­i­na­tion of other tax breaks to keep from in­creas­ing the bud­get deficit.

Trea­sury Sec­re­tary Steven T. Mnuchin said Satur­day that the off­set­ting would be ac­com­plished through the use of con­tro­ver­sial “dy­namic scor­ing,” which as­sumes those cuts would fuel faster eco­nomic growth.

“There’s no ques­tion we’re look­ing at re­forms that will pay for them­selves with growth,” Mnuchin said dur­ing a pub­lic ques­tion-an­dan­swer ses­sion with Chris­tine La­garde, man­ag­ing di­rec­tor of the In­ter­na­tional Mon­e­tary Fund.

“Un­der dy­namic scor­ing, this will pay for it­self,” he said. Un­der con­ven­tional “static scor­ing,” which doesn’t in­cor­po­rate growth es­ti­mates, “there will be short-term is­sues,” he said.

In 2015, House Repub­li­cans re­quired non­par­ti­san con­gres­sional num­ber crunch­ers to use dy­namic scor­ing as well as static scor­ing on ma­jor bills.

Dy­namic scor­ing uses com­plex mod­els to eval­u­ate the eco­nomic ef­fects of policy changes. But many economists are skep­ti­cal of dy­namic scor­ing be­cause they said it’s very com­pli­cated to ac­cu­rately make such es­ti­mates.

Su­san Walsh As­so­ci­ated Press

PRES­I­DENT Trump said last week that, “It will be big­ger, I be­lieve, than any tax cut ever.” He out­lined his tax prin­ci­ples and pro­posed rates dur­ing his cam­paign.

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