Continuing the recent flurry of leaks of the Trump tax plan set to be unveiled tomorrow, Axios reports that “GOP leaders have agreed to raise the lowest individual tax rate from 10 to 12 percent, paired with doubling the standard deduction.”
As previously leaked, the plan will also collapse the number of brackets from seven to three, while the standard deduction is set to almost double to $ 12,000 for a single filer and $ 24,000 for married couples, which means that Trump can correctly argue that many more low income earners would pay no tax under his plan. Also, as previously noted, the top tax bracket would fall from 39.6% to 35%.
According to Axios, Trump plans to sell the proposal tomorrow as a populist “tax cut” but notes that “as recently as yesterday top Republicans on Capitol Hill were nervous as they got word that Trump wasn’t entirely thrilled with the product that had been hashed out in immense secrecy for weeks with two members of his administration, Gary Cohn and Steven Mnuchin, working with GOP leaders.” However, that changed last night when Trump reportedly has come around to supporting the framework, “despite his misgivings about the corporate rate not being low enough and about the political risks of raising the lowest rate.”
The bottom line is that many more people will now pay no tax because of the increased deduction, which will allow Trump to pitch the proposal as a tax cut for the middle class as well as for the wealthy.
It was not immediately clear what the projected impact on the budget deficit will be as a result of said tax cut for both the middle class, for the highest earners, and for corporations and “pass thru” entities.
In previewing the rollout, Axios writes that Trump “won’t go into great detail when he talks about the tax plan tomorrow in Indiana, leaving plenty of negotiating room for the tax-writing committees in the House and Senate.”
As of yesterday morning Trump hadn’t signed off on the final product, and as with all policy announcements involving Trump, Republican Hill leaders will be holding their breaths to some extent until the president actually utters the words. Speaking with conservative groups at the White House yesterday Trump, reassured them of his commitment when he gushed about the “tax cut” he was planning to unveil.
Confirming his enthusiasm for the plan, moments ago President Trump said that “we will cut taxes tremendously for the middle class”, even as he added that he would discuss the framework for tax reform with lawmakers before it is released tomorrow.