Trump Admin: President Won’t Sign Any Hikes in Middle Class Taxes
Amid reports and rumors that some in the middle class would be faced with a tax increase as a result of the GOP’s reform plan, Office of Management and Budget Director Mick Mulvaney said in a CNN interview that President Trump would refuse to sign any such legislation.
“If our numbers here at the White House show the same thing, if they show taxes are going up on the middle class – on the House plan, the Senate plan, on some combination of the two – he won’t sign it,” Mulvaney said in an interview with Erin Burnett on Wednesday night. “He wants lower taxes on hard workers and he wants it to be easier for them to pay their taxes, that’s one principle. The other is he wants that lower corporate rate. If those two things are violated, he’s not going to sign a piece of legislation.
“At the end of the day,” he said, “if we believe this is a middle-class tax increase, he’s not going to sign it.”
The Democrats are busy spinning the current House plan as tax relief for the rich at the expense of the middle class and working families, but there is very little in the text of the bill to support this contention. Yes, it is true that those in the highest tax brackets will see the greatest cuts, but that’s to be expected from an across-the-board slashing of rates. The highest-income earners are also those who pay the overwhelming majority of taxes – rates that, in many cases, have proven so burdensome that it has led these earners (including corporations and successful small businesses) to come up with complex schemes to hold onto their profits.
But this is a tax plan that has something for everyone, as outlined by Grover Norquist in his Washington Examiner article last week.
“The House GOP tax plan, known as the ‘Tax Cuts and Jobs Act,’ cuts taxes at all income levels – rich, poor, and middle class,” Norquist wrote. “How do they do it? First, the House plan proposes sweeping reform to the way individuals are taxed. The bill consolidates the existing tax brackets from eight to five (the new rates are 0, 12, 25, 35, and 39.6 percent). It doubles the standard deduction and expands the child tax credit while repealing distortionary deductions and credits in favor of broad tax reduction. It also repeals the Alternative Minimum Tax and the Death Tax.”
Now, there’s no telling what the final bill will look like. Many lawmakers on both sides of the aisle have balked at the idea of cutting certain deductions – particularly the ones that provide relief for those who pay state and local income tax. Others insist that the tax plan must include more to encourage marriage and families. And there are still some significant disputes as to whether Republicans should try to remove Obamacare’s individual mandate through the tax bill. By the time the monkeys on Capitol Hill get done with this legislation, it may very well turn into a tax hike on the middle class, at which point Trump would have no choice but to make good on his promise to veto.
Hopefully things won’t come to that, but we can’t say that the last ten months have given us a lot of confidence in this party’s ability to turn good ideas into reality.