Trump lays groundwork for sweeping tax overhaul
“If the president wants to use populism to sell his tax plan, he ought to consider actually putting his money where his mouth is and putting forward a plan that puts the middle class, not the top 1 percent, first,” Sen. Chuck Schumer of New York, the Democratic leader, said in a conference call organized by progressive groups that are planning an intensive advertising and advocacy campaign to oppose Trump’s tax-cutting initiative.
“This is going to be one of the biggest fights of the next three, four months, and Democrats are ready for it,” Schumer added.
Many economists, too, rejected the premise underlying Trump’s stated priorities, arguing that large corporate tax cuts would do relatively little — particularly in the near term — to boost wages or create jobs, instead helping the wealthiest Americans who can afford to invest.
“Reducing their tax burdens would have no effect on ordinary workers,” Michael Linden of the Roosevelt Institute said of corporations. “Especially in the short run, taxation of corporations falls entirely on the owners of capital, and not at all on workers and consumers.”
Private negotiations among Gary D. Cohn, Trump’s top economic advisor; Steven Mnuchin, the Treasury secretary; and Republican congressional leaders and tax writers have yet to yield a proposal embraced by the White House and Republican lawmakers. And the already long odds of completing a plan and signing it into law before year’s end appear to be dwindling.
Already, Trump has had to temper his ambitions. Administration officials are now discussing a plan that would cut the 35 percent corporate tax rate to 20 to 25 percent, substantially higher than the 15 percent the president called for in April. They are also weighing leaving the top individual tax rate, which they wanted to lower to 35 percent, at its current 39.6 percent level.
The timetable has slipped considerably, as well. Mnuchin noted last week that his goal to produce a tax proposal by August never materialized, and he declined to predict that a plan would be enacted this year.
Instead, he said that he was “very hopeful” of doing so, and that Trump was “100 percent supportive of us passing legislation this year.”