Trump tax cut plan gains momentum after
U.S. budget vote
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[October 21, 2017]
By Amanda Becker
WASHINGTON (Reuters) - President Donald
Trump's tax reform plans won partial support on Friday when Republican
U.S. Senator Rand Paul said he was "all in" for massive tax cuts, but
the party was still far from united over how to achieve the main item on
its domestic agenda.
Trump's drive to overhaul the U.S. tax code cleared a critical hurdle on
Thursday when the Senate approved a budget measure that will allow
Republicans to pursue a tax-cut package without Democratic party
support.
But Republicans, who control both the Senate and House of
Representatives, have yet to produce a tax reform bill as a self-imposed
deadline to overhaul the U.S. tax code by the end of the year
approaches. The party's lawmakers differ widely on what cuts to make and
how to pay for them.
They are under intense pressure to succeed on tax reform after failing
so far to make good on their other main legislative ambition: scrapping
Obamacare, the signature healthcare law of former President Barack
Obama.

On major world markets, stock prices advanced on Friday, bond yields
rose, and the U.S. dollar strengthened on increased hopes that Trump
could make progress on his fiscal plans.
Democrats are likely to reject the Trump administration's tax plan,
which promises to deliver up to $6 trillion in tax cuts to businesses
and people but will bloat the federal deficit by $1.5 trillion over the
next decade.
FISCAL HAWK
Senator Rand Paul, a fiscal hawk, was the lone Republican to vote
against the budget measure on Thursday. He objected to spending levels
that he said would exceed agreed caps by $43 billion, and called for
spending reforms for so-called entitlements such as the Medicare and
Medicaid health insurance programs.
On Friday, Paul said in a post on Twitter that he was "all in" for the
"biggest, boldest cuts possible - and soon!" But he did not address the
specifics of the tax plan.
Trump on Friday expressed optimism about the tax reform, saying Paul
would eventually back the proposed tax measure when it comes up for a
vote.
"The Budget passed late last night, 51 to 49. We got ZERO Democrat votes
with only Rand Paul (he will vote for Tax Cuts) voting against," Trump
wrote on Twitter. "This now allows for the passage of large scale Tax
Cuts (and Reform), which will be the biggest in the history of our
country!"

Trump told Fox Business Network in a television interview set to air on
Sunday that he thinks Republicans have the votes to pass a big tax cut
package. He said he had been thinking about tying tax legislation to an
infrastructure spending bill but that it was not clear a combined
package would gain more votes.
"I don’t want to take any chances cause I feel we have the votes right
now the way it is," he said, according to a transcript provided by the
cable news outlet.
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Senator Rand Paul (R-KY) listens as U.S. President Donald Trump
speaks before signing an executive order making it easier for
Americans to buy bare-bones health insurance plans and circumvent
Obamacare rules at the White House in Washington, U.S., October 12,
2017. REUTERS/Kevin Lamarque

The budget resolution passed by the Senate on Thursday has to be
reconciled with a markedly different version passed by the House,
where Republicans say negotiations on a unified measure could take
up to two weeks.
The House budget resolution calls for a revenue-neutral tax bill and
would combine tax cuts with $203 billion in spending cuts to
mandatory programs, including food assistance for the poor.
As far as spending cuts go, the Senate version only instructs the
Energy and Natural Resources Committee to save at least $1 billion
over the next decade.
That difference could set up a possible conflict between Republicans
in the Senate and House as they negotiate a final budget blueprint.
Overhauling the complex U.S. tax code has defied Washington since
1986.
In the current effort, some Republican senators question the planned
repeal of a 40 percent inheritance tax levied on estates worth more
than $5.5 million, or $11 million for married couples, a tax paid
only by the wealthiest American taxpayers.
Republican lawmakers from high-tax states such as New York are also
seeking compromise on repealing the deduction from federal taxes for
state and local tax payments.
The party's lawmakers agree roughly on lowering the corporate income
tax rate from 35 percent but have not settled on a final number.

Trump seeks to cut the corporate rate to 20 percent, which he says
would create jobs and boost wages for blue-collar workers.
Asked how he would make the case that the plan would not be a tax
cut for the wealthy, House Speaker Paul Ryan told CBS, "That's why
we're introducing the fourth bracket, so that high-income earners do
not see a big rate cut and those resources go to the middle class
... and closing loopholes and carve outs which disproportionately
benefit the very high-income people."
(Reporting by Susan Heavey and Amanda Becker; Additional reporting
by Tim Ahmann; writing by Alistair Bell; editing by Bill Rigby)
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