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Trump Unveils Powerful Tax Plan, Including Huge Cuts

One of the things we like most about the Trump administration is their preference for simplicity. Again and again, President Trump has rolled out executive orders and proposals that can fit on a single sheet of printed paper. You could almost look at this as a kind of microcosmic reflection of Trump’s vision for the federal government: Simplify, simplify, simplify.

And simplification is the name of the game when it comes to Trump’s tax reform plan, the broad strokes of which were unveiled Wednesday.

Released by Trump’s chief economic adviser Gary Cohn and Treasury Secretary Steve Mnuchin, the plan will lead to – according to Cohn – “the most significant tax reform legislation since 1986, and one of the biggest tax cuts in American history.”

There is, of course, no guarantee that Congress will be able (or willing) to pass legislation that meets the president’s goals, but Republicans are long past due when it comes to furthering Trump’s agenda. The spending bill, when and if it passes, will bear little resemblance to the White House budget proposal released two months ago. And the repeal and replacement of Obamacare remains in limbo. When it comes to tax reform, the GOP leadership would be wise to remember who just won a national election – and who the American people trust with the direction of the economy.

Besides, there is nothing in Trump’s proposal that should inspire automatic rejection from congressional conservatives. The proposals are sound, if ambitious. They include:

  • Reducing the tax brackets down to just three categories: 10%, 25%, and 35%.
  • Raising the standard deduction for married couples to $24,000, double where it is today.
  • Repealing the 3.8% Obamacare tax on small business owners.
  • Repealing the estate tax.
  • Repealing the Alternative Minimum Tax.
  • And, most significantly, lowering the corporate tax rate from 35% down to 15%.

At least for now, the Republican leadership on Capitol Hill appears to be excited about the proposals. House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell released a joint statement praising the package.

“The principles outlined by the Trump Administration today will serve as critical guideposts for Congress and the Administration as we work together to overhaul the American tax system and ensure middle-class families and job creators are better positioned for the 21st century economy,” the GOP leaders said.

Unfortunately, the party’s ability to get Democrats on board with the plan may have less to do with the specifics of the president’s outline and more to do with the president’s personal income tax. As of now, Democrat leaders are still insisting that they will not cooperate on tax reform until Trump releases his own returns.

Done right, this legislation could energize the economy in a way Americans haven’t seen in decades, giving a big win to workers, business owners, and investors everywhere.

But it would also give a big win to the Trump administration, and as long as that’s the case, Democrats won’t want anything to do with it.

Written by Andrew


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