Trump lays ground­work for sweep­ing tax over­haul

Miami Herald - - FRONT PAGE -

“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.”

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