Trump vows tax plan to boost economy;
poll cites views on wealthy
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[October 12, 2017]
By Jeff Mason and David Morgan
HARRISBURG, Pa./WASHINGTON (Reuters) -
President Donald Trump on Wednesday told workers that they would win
under his tax plan, saying it would help the middle class and boost the
economy, though critics say it would mainly benefit corporations and the
Speaking in an airplane hangar at a Pennsylvania Air National Guard base
in Harrisburg with a trailer truck behind him, Trump reiterated the
basic points of the nine-page tax cut "framework" he unveiled two weeks
"It's a middle-class bill. That's what we're thinking of. That's what I
want," Trump said.
"I've had rich friends of mine come up to me, and say, 'Donald, you're
doing this tax plan -- we don't want anything. ... Don't give it to us.
Give it to the middle class.' And that's what we're trying so hard to
do," he said.
His remarks came as new Reuters/Ipsos polling showed that more than
three-quarters of Americans say the wealthiest Americans should pay more
The poll found 53 percent of adults "strongly agree" and 23 percent
"somewhat agree" that the wealthiest Americans should pay higher tax
rates. The Sept. 29-Oct. 5 poll of 1,504 people has a credibility
interval, a measure of accuracy, of plus or minus 6 percentage points.
Financial markets have rallied strongly since Trump's November 2016
election victory, driven partly by expectations that he would cut taxes
for businesses, although policy analysts have been skeptical that he
would do so.
Trump on Wednesday boasted about the rally in markets.
"The stock market is soaring to record levels, boosting pensions and
retirement accounts for hard-working Americans. Their values are going
up every single day," he said.
Earlier on Wednesday, San Francisco Federal Reserve Bank President John
Williams said he was a "little bit discouraged" about the prospects for
federal tax reform.
Given the difficulties Congress has had in passing laws this year,
Williams, in comments following a speech in Salt Lake City, said he is
"losing confidence" that any tax reform will be passed in the next six
months or so.
DEMOCRATS DISPUTE "PAY RAISE"
Trump said his plan for cutting corporate taxes could boost wage growth
and mean a $4,000 pay raise for the average household, citing research
from a White House economic council.
Democrats, who oppose Trump's plan, dispute such claims.
"I have not seen any evidence that even comes remotely close to that,"
Richard Neal, the top Democrat on the House of Representatives Ways and
Means Committee, said of the $4,000 calculation at a forum on Wednesday
Independent analysts have said Trump's blueprint would provide uneven
tax relief, add significantly to the federal budget deficit, and in some
cases, benefit the very wealthy.
For instance, taxpayers in the highest 1 percent of incomes, making more
than $730,000 annually, would get about half of the total benefit from
Trump's plan, with after-tax incomes rising an average of 8.5 percent,
according to the Tax Policy Center, a Washington-based nonprofit tax
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The setting sun reflects off of the twin towers of Time Warner
Center in the Manhattan borough of New York City, November 22, 2015.
Trump on Wednesday said his framework would provide a $500 tax
credit to "those who care for an adult dependent or elderly loved
one" and that it would substantially increase the child tax credit.
No details on those items have been made public.
Congressional tax writers in the House and Senate are working to
fill in the details of Trump's framework. Republican leaders hope to
pass a bill by January, delivering what would be Trump's first
legislative victory a year into his presidency.
Before that can happen, the Senate and House must open a procedural
path for tax legislation by passing a budget resolution. Lawmakers
have hoped to do that this month.
CORPORATE, PASS-THROUGH CUTS
The tax framework, developed in secret by a select group of senior
Republicans known as the Big Six, calls for cutting the corporate
tax rate to 20 percent from 35 percent and creating a new category
for pass-through income earned by partners and sole proprietors,
which would be taxed at 25 percent, instead of the 39.6 percent top
individual rate currently paid by some.
It proposes cutting the top individual rate to 35 percent, but
congressional tax writers may opt to create an additional, higher
rate for the highest earners.
The plan also proposes eliminating the 40 percent tax on inherited
estate assets worth more than $5.5 million, or $11 million for a
A highly placed Republican operative who used to work with senior
leadership on Capitol Hill said he did not expect the estate tax
repeal to be included in a final package, because the proposal would
greatly benefit Trump himself and his family, which would leave the
tax reform effort and Trump open to Democratic attack.
He said many Republicans do not see estate tax repeal as crucial,
but Republicans have promised wealthy supporters for years that the
tax, which they call the "death tax," will end.
Trump on Wednesday offered a different view. Republicans will end
"the crushing, horrible, and unfair estate tax," he said.
(Additional reporting by Eric Beech, James Oliphant and Steve
Holland in Washington, Ann Saphir in Salt Lake City, Chris Kahn in
New York; Writing by Amanda Becker; Editing by Kevin Drawbaugh and
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