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[webfact]

Trump proposal slashes taxes on businesses, the rich; fuels deficit worries

By David Morgan and Richard Cowan

 

U.S. President Donald Trump walks to Marine One as he departs for New York from the White House in Washington, U.S., September 26, 2017. REUTERS/Joshua Roberts

 

WASHINGTON (Reuters) - President Donald Trump on Wednesday proposed the biggest U.S. tax overhaul in three decades, offering to cut taxes for most Americans but prompting criticism that the plan favours the rich and companies and could add trillions of dollars to the deficit.

 

The proposal, which the Republican president said was aimed at helping working people, creating jobs and making the tax code more simple and fair, faces an uphill battle in Congress with Trump's own party divided and Democrats hostile.

 

The plan would lower corporate income tax rates, cut taxes for small businesses, reduce the top income tax rate for individuals and scrap some widely used tax breaks including one that benefits people in high-tax states dominated by Democrats.

 

Forged during months of talks among Trump's aides and top Republicans in Congress, the plan contained scant details about how to pay for the cuts without fuelling deficits. It must be turned into detailed legislation by the Republican-led congressional tax-writing committees.

 

Speaking at an event in Indianapolis, Trump called the plan the largest tax cut in U.S. history and "historic tax relief to the American people."

 

"This is a once-in-a-generation opportunity," Trump said. "We want tax reform that is pro-growth, pro-jobs, pro-worker, pro-family and yes tax reform that is pro-American."

 

Trump, a real estate mogul-turned-politician who promised big tax cuts as a candidate last year, said earlier on Wednesday when asked by reporters that he personally would not stand to gain financially from the proposal.

 

"I think there's very little benefit for people of wealth," said Trump, who has refused to make public his own tax returns unlike many of his White House predecessors.

 

Republicans have produced no major legislative successes since Trump took office in January even though they control the White House and both chambers of Congress.

 

The Republicans' top legislative priority, an overhaul of the U.S. healthcare system, collapsed in the Senate on Tuesday, while another key item on Trump's wish list, infrastructure spending, has yet to materialise.

 

A comprehensive rewrite of the U.S. tax code has eluded lawmakers for decades. The last one was passed in 1986.

 

The White House said that under the proposal typical middle-class families would have less of their income subject to federal income tax. Trump noted that the first $12,000 earned by an individual and the first $24,000 by a married couple would be tax-free.

 

The plan would lower the top individual rate from to 35 percent from 39.6 percent.

 

It foresees a 20 percent corporate income tax rate, down from the current 35 percent but not as low as Trump's initial demand for 15 percent.

 

Companies in the United States pay high taxes by global standards but many of them pay much less than the headline rate due to loopholes and tax breaks.

 

The proposal now faces a long legislative process that could take months. Trump has appealed to Democrats to support the plan, although they were not consulted in drafting it.

 

'HOLDING THE BAG'

 

"Under this plan, the wealthiest Americans and wealthiest corporations make out like bandits while middle-class Americans are left holding the bag," said Chuck Schumer, the top Senate Democrat.

 

Republicans hold a thin 52-48 majority in the Senate and may need some Democrats on board to win passage. But Democrats said the plan would expand the federal deficit in order to deliver tax cuts to wealthy Americans rather than the middle-class families that Trump and Republicans say they are trying to help.

 

"If this framework is all about the middle class, then Trump Tower is middle-class housing," said Senator Ron Wyden, the top Democrat on the Senate Finance Committee.

 

Kevin Brady, chairman of the tax-writing House of Representatives Ways and Means Committee, said he expected tax legislation to be passed by the end of this year.

 

House Speaker Paul Ryan, a Republican, said, "This is a now-or-never moment."

 

The White House and congressional Republicans did not give an estimate of the plan's cost or how much it might add to federal deficits. The Committee for a Responsible Federal Budget policy group on Wednesday estimated that the plan contains about $5.8 trillion over a decade of total tax cuts and would have a net cost of $2.2 trillion through 2027.

 

Analysts have warned that huge tax cuts would balloon the federal deficit and debt if economic growth projected by Republicans to offset the costs fails to materialise amid rising interest rates.

 

The tax framework would establish a 25-percent rate for business income from businesses called "pass-throughs." These usually small, private enterprises represent an estimated that 95 percent of all U.S. businesses.

 

Under current tax law, business profits are "passed through" to owners as personal income, which is often taxed at the top 39.6 percent individual income tax rate.

 

Republicans proposed eliminating some existing tax deductions, though they retain deductions for mortgage interest payments and charitable deductions. They proposed scrapping the deduction for the amount a taxpayer pays in state and local taxes, which could hurt people in high-tax states including California and New York that tend to vote Democratic.

 

The plan, which would retain deductions for mortgage interest payments and charitable deductions, aims to consolidate the current seven tax brackets into three brackets of 12 percent, 25 percent and 35 percent.

 

The proposal was embraced by the U.S. Chamber of Commerce business lobbying group and an organisation called the RATE Coalition representing large American companies including AT&T Inc <T.N>, FedEx Corp <FDX.N>, Home Depot Inc <HD.N>, General Dynamics Corp <GD.N> and Walmart Stores Inc <WMT.N>.

 

(Reporting by David Morgan and Richard Cowan; Additional reporting by Susan Heavey, Doina Chiacu and Amanda Becker; Writing by Will Dunham; Editing by Alistair Bell)

 

-- © Copyright Reuters 2017-09-28

[Samui Bodoh]

11 minutes ago, webfact said:

Forged during months of talks among Trump's aides and top Republicans in Congress, the plan contained scant details about how to pay for the cuts without fuelling deficits.

 

When the Republican party does not hold power in one of the houses of congress or the Presidency, it complains endlessly about the deficit.

 

When the Republicans do hold some power, the deficit does not matter.

 

It is weapons-grade hypocrisy.

 

 

[craigt3365]

DOA. Dead on Arrival.

[ilostmypassword]

Trump Tax Plan Benefits Wealthy, Including Trump

The tax plan that the Trump administration outlined on Wednesday is a potentially huge windfall for the wealthiest Americans. It would not directly benefit the bottom third of the population. As for the middle class, the benefits appear to be modest.

 

https://www.nytimes.com/2017/09/27/us/politics/trump-tax-plan-wealthy-middle-class-poor.html?_r=0

Among other things, it would get rid of the alternative minimum tax. What we know from Trump's 2005 tax return is that the alternative minimum tax cost him 31 million dollars. Without that, he would have paid nothing. Go Trump!

[edwinchester]

No surprise that somebody who bankrupted his own business, and boasted about it, rather than apologising to the small traders he wiped out, is doing the same to an entire country.

[tonray]

I'm once again appalled at the misinformation from the right. Larry Kudlow, noted economist talking this morning about how huge a 'doubling' of the standard deduction will be !

 

Except he does not mention the elimination of the personal exemption so that it really boils down to a 15% increase in the SD and not a 100% increase. But he conveniently left that out of his cheerleading all day.

 

Now....personally I think it's a good thing if we can cut back expenses to pay for it....the mumbo jumbo of the economy will grow enough to pay for it is nebulous at best.

[tonray]

3 hours ago, Samui Bodoh said:

 

When the Republican party does not hold power in one of the houses of congress or the Presidency, it complains endlessly about the deficit.

 

When the Republicans do hold some power, the deficit does not matter.

 

It is weapons-grade hypocrisy.

 

 

That's not their argument. They argue that deficit spending that only gives away money (example social welfare programs) is not comparable to deficit spending that stimulates growth. so their argument is understandable but they ignore the economic effects of social welfare on boosting the economy too. It's unfortunately a very complicated issue that neither side has figured out because they are both tied to ideologies that have for the large part been unproven over the long term because of the switch in power every decade or so.

[funandsuninbangkok]

This is the big one. 

 

First draft looks good!

 

should make upper rate a lot lower however. 

 

 

 

 

[blazes]

Has any American company ever paid 15% corporation tax (let alone 35%!!!!!!!)??

[ilostmypassword]

Here's what Trump said about his tax plan:

“I’m doing the right thing and it’s not good for me, believe me. … We are also repealing the alternative minimum tax, or AMT.”

https://www.washingtonpost.com/news/fact-checker/wp/2017/09/28/fact-checking-president-trumps-tax-speech-in-indianapolis/?nid&utm_term=.ab4fc7f2d4fd

 

Does anybody out there believe him?

[dunroaming]

Well he has tried most things to bring the USA to it's knees so I guess bankrupting the country is worth a try as well!

[attrayant]

In the past 30 years or so, the top marginal tax rate has gone from around 70% to less than 40%, but over that time workers wages have remained essentially unchanged.  The top 1% are as happy as can be, taking home more than 20% of the national income.  Tax cuts for the rich have done little to grow the economy.

 

[ilostmypassword]

Here's a devastating critique of the Republican tax cut mysticism by Bruce Bartlett, one of its creators:

https://www.washingtonpost.com/news/posteverything/wp/2017/09/28/i-helped-create-the-gop-tax-myth-trump-is-wrong-tax-cuts-dont-equal-growth/?nid&utm_term=.8cfc94dfc3b6

[craigt3365]

13 hours ago, ilostmypassword said:

Here's what Trump said about his tax plan:

“I’m doing the right thing and it’s not good for me, believe me. … We are also repealing the alternative minimum tax, or AMT.”

https://www.washingtonpost.com/news/fact-checker/wp/2017/09/28/fact-checking-president-trumps-tax-speech-in-indianapolis/?nid&utm_term=.ab4fc7f2d4fd

 

Does anybody out there believe him?

As usual, it's all about Trump.  Amazing some still support this criminal and liar.

 

http://money.cnn.com/2017/09/28/news/economy/trump-tax-plan/index.html

Quote

4 ways Trump and his family could benefit under the Republican tax plan

 

[ilostmypassword]

Trump keeps claiming that giving corporations a really low tax rate on repatriated cash will will use it to invest and hire more employees. It's a lie.

 

Trump says his tax break will get companies to hire more workers. Companies say it won’t.

 

When Bank of America Merrill Lynch surveyed more than 300 top U.S. companies this summer about their plans for Trump’s “tax holiday” on overseas cash, 65 percent said they would bring the money back to the United States and use it to pay down debt. The next most popular plan was to spend the money on stock buybacks — when companies purchase their own stock, driving up the price.

 

“Companies want to get their money back to buy stock and goose the stock price because their senior executives derive so much of their compensation from the stock prices,” said Edward Kleinbard, a tax law professor at the University of Southern California and former chief of staff for Congress’s nonpartisan Joint Committee on Taxation.

https://www.washingtonpost.com/news/wonk/wp/2017/09/13/trump-says-his-tax-break-will-get-companies-to-hire-more-workers-companies-say-it-wont/?utm_term=.e9852001b42e

[ilostmypassword]

Not even a majority of republicans favor cutting corporate taxes or taxes on the rich.

http://www.pewresearch.org/fact-tank/2017/09/27/more-americans-favor-raising-than-lowering-tax-rates-on-corporations-high-household-incomes/ft_17-09-27_incometaxes_party/

 

[pegman]

On September 27, 2017 at 9:18 PM, tonray said:

I'm once again appalled at the misinformation from the right. Larry Kudlow, noted economist talking this morning about how huge a 'doubling' of the standard deduction will be !

 

Except he does not mention the elimination of the personal exemption so that it really boils down to a 15% increase in the SD and not a 100% increase. But he conveniently left that out of his cheerleading all day.

 

Now....personally I think it's a good thing if we can cut back expenses to pay for it....the mumbo jumbo of the economy will grow enough to pay for it is nebulous at best.

It's been tred recently.

 

https://www.vox.com/policy-and-politics/2017/6/7/15753510/kansas-brownback-tax-reform

[ilostmypassword]

Treasury Removes Paper at Odds With Mnuchin’s Take on Corporate-Tax Cut’s Winners

The Treasury Department has taken down a 2012 economic analysis that contradicts Secretary Steven Mnuchin’s argument that workers would benefit the most from a corporate income tax cut.

The 2012 paper from the Office of Tax Analysis found that workers pay 18% of the corporate tax while owners of capital pay 82%. That is a breakdown in line with many economists’ views and close to estimates from the nonpartisan Joint Committee on Taxation and Congressional Budget Office.

https://www.wsj.com/articles/treasury-removes-paper-at-odds-with-mnuchins-take-on-corporate-tax-cuts-winners-1506638463?tesla=y

[riclag]

"A lot of this plan's details have yet to be determined, and it's almost certain that what's proposed today will change before Congress has the chance to vote on it". 

[heybruce]

On 9/27/2017 at 11:20 PM, tonray said:

That's not their argument. They argue that deficit spending that only gives away money (example social welfare programs) is not comparable to deficit spending that stimulates growth. so their argument is understandable but they ignore the economic effects of social welfare on boosting the economy too. It's unfortunately a very complicated issue that neither side has figured out because they are both tied to ideologies that have for the large part been unproven over the long term because of the switch in power every decade or so.

The Republicans probably won't be so stupid as to repeat Dick Cheney's "deficits don't matter" claim.  Well, maybe some of the Fox News pundits will be that stupid.

 

The Republicans are repeating the discredited Laffer curve nonsense that cutting taxes will lead to economic growth and a net increase in tax revenues.  They can't give an example of that happening (though many claim they can, they never deliver), and the connection between tax cuts and economic growth is tenuous at best, but their not worried about long term deficits.  The Republicans in Congress aren't thinking beyond the next election.

 

There was a breath-taking about turn made by Republican cheerleaders when Republican President George W. Bush left office after approving a federal budget that lead to a $1.3 trillion deficit (yes, trillion, as in $1,300,000,000,000) and Democratic President Barrack Obama took office and had to deal with an economy in free-fall along with the massive deficit.  It can be accurately summarized as:

 

Republican President--deficits don't matter.

Democratic President--deficits will be the ruin of the nation!

 

We have a Republican President again.  Guess what?  Deficits don't matter!

[heybruce]

On 9/28/2017 at 1:59 AM, blazes said:

Has any American company ever paid 15% corporation tax (let alone 35%!!!!!!!)??

Many small businesses pay close to the maximum.  Big businesses can afford lobbyists and buy exemptions, so they pay much less.

[ilostmypassword]

On 9/29/2017 at 12:49 PM, riclag said:

"A lot of this plan's details have yet to be determined, and it's almost certain that what's proposed today will change before Congress has the chance to vote on it". 

It would have to be massively changed to make it equitable given that the current non-partisan analysis says that almost 80 percent of the benefits would flow to the 1 percent. Actually mostly to the .1 percent.  And shockingly enough one of the chief beneficiaries of the proposed plan would be pass-through businesses. Their tax rate would be lowered from 39.6 percent to 25 percent. I'll give you 1 guess as to what kind of business the Trump organization is. But not to worry, Trump gave his word that the plan wouldn't benefit him. 

[funandsuninbangkok]

On 9/28/2017 at 12:59 PM, blazes said:

Has any American company ever paid 15% corporation tax (let alone 35%!!!!!!!)??

Every American product and service has the tax added on to its cost. Invisible to consumers. That's why politicians and communists like high corp tax

[funandsuninbangkok]

9 minutes ago, ilostmypassword said:

It would have to be massively changed to make it equitable given that the current non-partisan analysis says that almost 80 percent of the benefits would flow to the 1 percent. Actually mostly to the .1 percent.  And shockingly enough one of the chief beneficiaries of the proposed plan would be pass-through businesses. Their tax rate would be lowered from 39.6 percent to 25 percent. I'll give you 1 guess as to what kind of business the Trump organization is. But not to worry, Trump gave his word that the plan wouldn't benefit him. 

Hey, guess that 1% is just smarter than the other 99. 

[ilostmypassword]

37 minutes ago, funandsuninbangkok said:

Hey, guess that 1% is just smarter than the other 99. 

And I'm sure that fact that they contribute large sums to politicians has nothing to do with it.

[selftaopath]

On 9/28/2017 at 5:06 PM, ilostmypassword said:

Here's what Trump said about his tax plan:

“I’m doing the right thing and it’s not good for me, believe me. … We are also repealing the alternative minimum tax, or AMT.”

https://www.washingtonpost.com/news/fact-checker/wp/2017/09/28/fact-checking-president-trumps-tax-speech-in-indianapolis/?nid&utm_term=.ab4fc7f2d4fd

 

Does anybody out there believe him?

 

[selftaopath]

2 hours ago, heybruce said:

The Republicans probably won't be so stupid as to repeat Dick Cheney's "deficits don't matter" claim.  Well, maybe some of the Fox News pundits will be that stupid.

 

The Republicans are repeating the discredited Laffer curve nonsense that cutting taxes will lead to economic growth and a net increase in tax revenues.  They can't give an example of that happening (though many claim they can, they never deliver), and the connection between tax cuts and economic growth is tenuous at best, but their not worried about long term deficits.  The Republicans in Congress aren't thinking beyond the next election.

 

There was a breath-taking about turn made by Republican cheerleaders when Republican President George W. Bush left office after approving a federal budget that lead to a $1.3 trillion deficit (yes, trillion, as in $1,300,000,000,000) and Democratic President Barrack Obama took office and had to deal with an economy in free-fall along with the massive deficit.  It can be accurately summarized as:

 

Republican President--deficits don't matter.

Democratic President--deficits will be the ruin of the nation!

 

We have a Republican President again.  Guess what?  Deficits don't matter!

It's like a barter system. Rich individuals and corporations give money to Republicans (mostly) and they in turn lower taxes/ destroy unions / reject wage increases etc. I can not for the life of me understand how a working individual can vote for them. What have they really done for America? 

[riclag]

Demonizing business owners and the rich again and again.Two things in life I must do is pay taxes and die.I'm not drinking Soda anymore,it leads to the latter .

[Grouse]

Isn't the USA just awful now ?

[ilostmypassword]

10 hours ago, riclag said:

Demonizing business owners and the rich again and again.Two things in life I must do is pay taxes and die.I'm not drinking Soda anymore,it leads to the latter .

Who's demonizing them? Some of us are just pointing out that the tax proposal, as it stands is likely to disproportionately favor the rich. And that it's almost certain - given the nature of Trump's business - that he's lying when he says the tax proposal won't benefit him.