WASHINGTON (USA TODAY) — President Trump says on Wednesday he will bring “revolutionary change” to the federal tax code so that American companies and workers can “start winning again."
Speaking in Indianapolis, Ind., Trump was expected to present a roadmap for a tax plan he wants Congress to pass before the end of the year to deliver what he has said would be the largest tax cut in the nation's history.
"Under our framework, we will dramatically cut the business tax rate so that American companies and American workers can beat our foreign competitors and start winning again," Trump will say, according to an excerpt provided by the White House.
Trump is also promising to reduce the corporate tax rate to "below the average of other industrialized nations," which he said would be "a revolutionary change, and the biggest winners will be middle class workers as jobs start pouring into our country, as companies start competing for American labor, and as wages continue to grow."
Trump is seeking a much-needed win as he recovers from Republicans’ failure to repeal Obamacare and the loss of Luther Strange, Trump’s chosen candidate in the Alabama Senate primary on Tuesday.
As he left the White House on Wednesday, Trump promised his tax plan would be "the largest tax cut essentially in the history of our country. It's going to be something special."
The proposed changes including slashing the corporate and individual tax rates. Trump said he wants Republicans and Democrats to work together on the plan.
“This is our once-in-a-generation opportunity to fundamentally rethink our tax code,” Senate Majority Mitch McConnell, R-Ky., said before the Indianapolis speech.
Under the framework agreed to by Trump and congressional leaders, working poor people could owe no income tax. Filing a return could get much simpler. And there would even be a new credit for caring for elderly relatives.
Republicans also want to eliminate two taxes paid entirely by the rich, and take away a deduction for state and local taxes that is used most heavily in some of the most wealthy, and Democrat-dominated, states.
But many details are still to be worked out, including how much the changes would add to the deficit.
"Without sufficient details on how or even if these tax cuts will be fully paid for, this outline is nothing more than a fiscal fantasy," said Maya MacGuineas, head of the nonpartisan Committee for a Responsible Federal Budget.
The missing information also makes it difficult to calculate the winners and losers of Trump's plan.
Trump has said his priorities are helping the middle class and boosting jobs, promising earlier this month that “the rich will not be gaining at all with this plan.”
He told reporters Wednesday that he wouldn't personally benefit.
But Senate Minority Leader Chuck Schumer, D-N.Y., said the framework released Wednesday “at best throws crumbs for some middle class people.”
“Has the president read his plan?” Schumer asked.
One Democrat who has said he’s willing to listen to Trump’s ideas is Indiana Sen. Joe Donnelly, who flew to the speech with the president on Air Force One.
Donnelly, one of Republicans’ best chances of expanding their narrow Senate majority in next year’s elections, was also one of only three Democratic senators who did not sign onto an August letter sent by Democratic leaders outlining what conditions must be met for the minority to support tax reform.
Most Democrats said they won’t support tax cuts for the wealthiest Americans and won’t vote for an overhaul that adds to the deficit.
Trump said tax reform doesn’t have to be a partisan issue.
“There is no reason that Democrats and Republicans in Congress should not come together to deliver this giant win for the American people and begin the 'middle class miracle' once again," he said.
Donnelly has said he wants a bipartisan effort that will give working and middle-class families greater economic security. He's specifically pushing changes to reward companies that keep jobs in the United States and penalize businesses that move them overseas.
But Robert James, president of the steelworkers union that represents workers at plants — including Carrier Corp. — which have recently laid off workers, said Wednesday the proposal won’t do anything to keep jobs in the United States.
“I don’t see it,” James said. “I don’t think this is something that benefits the people.”
Trump’s visit to Indiana is his first since going in December to announce a deal with Carrier Corp. — a company he talked about frequently on the campaign trail — to keep some jobs in Indiana instead of moving them to Mexico.
Trump chose Indiana for Wednesday’s speech in part to talk about the state’s record of cutting taxes under then Gov. Mike Pence, who is now his vice president.
"Indiana is a tremendous example of the prosperity that is unleashed when we cut taxes and set free the dreams of our citizens,” Trump was expected to say, according to a speech excerpt provided by the White House.
Since 2011, Indiana has eliminated the inheritance tax, cut corporate and financial institution taxes and reduced the flat personal income tax by 5 percent.
"It’s the Hoosier Way, and we’re about to take it national,” said Indiana GOP Chairman Kyle Hupfer.
While conservatives have praised the cuts, some economists have seen them and the subsequent increase in Indiana's gas tax as a shift of the tax burden to Indiana's middle class.
Indiana Democratic Party Chairman John Zody said Wednesday the “historic” tax relief Pence promised Hoosiers “only added up to a paltry $50 per household last year — barely enough for one tank of gas.”
Trump was expected to highlight how the proposal would benefit individual Hoosiers, including Kip Tom, a 7th generation farmer who was on Trump’s agriculture advisory committee. The Tom family claims that under current estate taxes, they may have to sell off a significant amount of assets in order to pass the business to the next generation.
Democrats say repealing the estate tax is one of the several ways the tax overhaul would benefit the wealthy, pointing out that it only affects estates worth more than $5.5 million.
National polls show tax reform isn’t a high priority for many Americans. Only 12% of adults surveyed this month for CNN said changing federal tax law should be Congress' highest priority over the next few weeks. But most said the code either needs a complete overhaul or major changes.
The Pew Research Center has found in recent years that most Americans think they’re paying about the right amount of taxes. Their top frustration is that some corporations and the wealthy don’t pay their fair share.
Contributing: Herb Jackson, Heidi Pryzbyla, Kaitlin Lange.
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