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Old April 27th, 2017, 06:38 AM   #1
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The Tax Cut Proposal (part 2)

President Trump’s call for a dramatic overhaul of the tax code sets in motion his most ambitious legislative initiative to date, testing whether he can cut the deal of his life on an issue that has long bedeviled Washington.

On Wednesday, Trump issued a one-page outline for changes to the tax code, pinpointing numerous changes he would make that would affect almost every American.

He wants to replace the seven income tax brackets with three new ones, cut the corporate tax rate by more than 50 percent, abolish the alternative-minimum tax and estate tax, and create new incentives to simplify filing returns.

But the White House stopped short of answering key questions that could decide the plan’s fate. For example, Trump administration officials didn’t address how much the plan would reduce federal revenue or grow the debt. They also didn’t specify what income levels would trigger inclusion in each of the three new tax brackets.

The goal, White House officials said, was to cut taxes so much and so fast that it led to immediate economic growth, creating more jobs and producing trillions of dollars in new revenue and wealth over the next decade.

Despite its brevity — it was less than 200 words and contained just seven numbers — the document marked the most pointed blueprint Trump has presented Congress on any matter.

“This is about economic growth, job creation, America first, and that’s what [Trump] cares about,” White House National Economic Council Director Gary Cohn said. “Our tax plan is a big leg of that stool. It’s a big leg. And in many respects, he thinks it’s the most important leg.”

The plan now must navigate a legislative and political gantlet on Capitol Hill that has killed numerous other efforts to rework the tax code.

Business groups were already squaring off. The National Association of Realtors called the proposal a “non-starter,” alleging that it would remove tax incentives for people to buy homes because of changes it would make to certain tax deductions.

The U.S. Chamber of Commerce, by contrast, issued a statement saying the plan would “help drive job creation, investment, and economic growth.”

Ronald Reagan was the last president to shepherd a major tax overhaul through Washington, but he did it by working with Democrats to cut a deal. Treasury Secretary Steven Mnuchin said Wednesday that he would like to negotiate details of the plan with Democrats but would cut them out of talks if necessary and seek only support from Republicans, perhaps by pursuing a strategy known as “reconciliation.” Using that process, a tax overhaul could escape a 60-vote requirement in the Senate, but it also would have a 10-year expiration date.

Trump’s proposal now poses key tests for both parties. Republicans, who for years chided President Barack Obama about any plan to raise the deficit, must decide whether to back a plan that many budget experts calculate will add to record levels of government debt. The Committee for a Responsible Federal Budget said the plan would probably lead to a loss in government revenue by roughly $5.5 trillion over 10 years.

But so far, key Republicans have praised the core of Trump’s plan and signaled a willingness to negotiate with him on key details.

Speaking Wednesday morning on Capitol Hill, House Speaker Paul D. Ryan (R-Wis.) called Trump’s framework “a critical step forward in this effort.”

“We’ve been briefed on what they are going to do, and it is basically along exactly the same lines we want to go,” Ryan said. “So we see this as progress being made, showing that we are moving and getting on the same page. We see this as a good thing.”

Democrats, meanwhile, must decide whether to negotiate with an unpopular president who is threatening to pull away tax revenue that pays for many of their cherished social programs.

“This is an unprincipled tax plan that will result in cuts for the [wealthiest Americans], conflicts for the president, crippling debt for America and crumbs for the working people,” said Sen. Ron Wyden (Ore.), the top Democrat on the Senate Finance Committee.

[Trump’s tax proposal: How his plan could affect you]

Trump’s proposal includes significant changes to both of the major elements of the tax code, the individual side and the business side.

For individuals, it would eliminate the seven existing income tax brackets and replace them with three brackets, containing new rates of 10*percent, 25*percent and 35*percent, based on a person’s income. White House officials haven’t specified which income levels would hit the higher tax brackets, as they see this being part of ongoing discussions with Capitol Hill.

The proposal would also roughly double the standard deduction that Americans can use to reduce their taxable income. The deduction for married couples would rise from $12,600 to $24,000. This would incentivize people not to itemize their tax returns and instead use the larger standard deduction, simplifying the process and potentially saving taxpayers thousands of dollars each year. It may also change how people value certain tax breaks: For example, fewer people might buy homes with the help of the mortgage interest deduction if they don’t itemize their taxes.

The White House plan would eliminate the alternative-minimum tax and the estate tax, provisions that raise billions of dollars each year and mainly raise the taxes paid by wealthier Americans.

To offset the loss of revenue from lower tax rates and other changes, Cohn and Mnuchin said they were proposing to eliminate virtually all tax deductions that Americans claim, provisions that they argued primarily benefited wealthier Americans. Cohn said they would preserve tax breaks for mortgage interest, retirement savings and charitable giving. But almost all others would be jettisoned.

This includes the tax deduction people can claim for the state and local taxes they pay each calendar year, a provision that saves taxpayers more than $1 trillion every 10 years. These taxes can be particularly high in states with higher income taxes, such as California and New York, so the change could be acutely felt there.






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Old April 27th, 2017, 07:10 AM   #2
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Trump's new plan is his opening bid, which explains the lack of details and the abridged legislation. Whether it passes or not is of no relevence to King Trump, because he will just *shrug* and say to the American people...."SEE....I tried SO HARD to keep my promise...but those damn legislators just wouldn't play." We saw the same thing with ACA Repeal and Replace.
Trump and cult still thinks that running a country is like running a business. It's not. Period.
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Old April 27th, 2017, 07:48 AM   #3
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Just another plan to allow capitalism to enslave the people with choices. More greed to be fed off the backs of the workers
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Old April 27th, 2017, 10:12 AM   #4
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Part 3?

Trump 'backs down' in new short-term spending bill

US lawmakers have reached a deal to avert a federal government shutdown after the White House backed off a threat to withhold Obamacare subsidies.

The stop-gap bill announced late on Wednesday allows Congress an extra week to reach a final deal to fund the government through September.

Congress had until Friday to negotiate a bill to keep the government running.
Democrats declared a victory after the White House agreed to continue paying the so-called cost-sharing reductions.

They refused to support the bill unless it allowed for an Obamacare provision that paid health insurance companies to help keep medical costs down for low-income Americans.

The concession comes after President Donald Trump had earlier dropped a demand to include funding for his controversial border wall in the spending bill.
Trump 'backs down' in new short-term spending bill - BBC News
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