WASHINGTON — President Donald Trump and congressional Republicans unveiled a framework Wednesday for what he called a “once-in-a-generation opportunity” to overhaul the tax system, seeking to streamline the tax code and slash rates for businesses.
Trump dubbed the plan a “middle-class miracle” even as Democrats assailed it as hurting everyday Americans in order to help the rich.
“We want tax reform that is pro-growth, pro-jobs, pro-workers, pro-family and, yes, tax reform that is pro-American,” the president said, promising “historic tax relief” with a speech in Indianapolis.
But the nine-page blueprint left many questions unanswered, including what it will cost, how it will be paid for and its effect on the national deficit and entitlement programs. It also proposes to eliminate deductions for state and local taxes, creating a “double taxation” scenario that New York lawmakers of both parties condemned as a nonstarter.
Among the changes the blueprint lays out are: reducing the corporate tax rate to 20 percent, doubling the standard deduction to $12,000 for individuals and $24,000 for families; repealing most itemized deductions while retaining ones for mortgage interest and charitable giving; increasing the child tax credit; eliminating the alternative minimum tax, and dropping the estate tax.
Though it calls for consolidating the number of tax brackets from seven to three — 12 percent, 25 percent and 35 percent — it does not set the income thresholds for those rates.
The “Unified Framework for Fixing Our Broken Tax Code” serves as template for congressional tax-writing committees, which encourage bipartisan input, according to the office of Senate Majority Leader Mitch McConnell (R-Ky.).
Trump pledged that the middle class stands to benefit, “not the wealthy and well-connected.”
“They can call me all they want. It’s not going to help,” the real estate mogul said of fellow top earners. “I’m doing the right thing, and it’s not good for me, believe me.”
The governing GOP has much riding on its tax push.
Trump is in need of a major legislative victory as efforts to fulfill Republicans’ seven-year promise to uproot Obamacare repeatedly fell short of Senate GOP votes.
McConnell and House Speaker Paul Ryan (R-Wis.) on Wednesday both joined Trump in using the “once-in-a-generation” description of the high-stakes tax plan rollout.
Meanwhile, Democrats decried the blueprint as detrimental to the nation’s middle class. Without a road map on how to fund the cuts, it could balloon the deficit and debt and adversely affect entitlement programs such as Medicare, Senate Majority Leader Chuck Schumer (D-N.Y.) said.
There is evidence in the GOP-released numbers that is contrary in Trump’s claim of relief for the middle class, Schumer said at the Capitol. “Our best ammunition is what they’re saying and what they’re doing is different,” he said.
The top tax bracket would fall to 35 percent from 39.6 percent while the bottom one would rise to 12 percent from 10 percent, Schumer noted.
The nonpartisan Committee for a Responsible Federal Budget noted the lack of details on cost offsets and its rough estimate found the framework would cost $2.2 trillion.
The progressive Americans for Tax Fairness group estimated that the Trump’s “unpaid-for” tax cuts could total $5 trillion.
Schumer, Rep. Kathleen Rice (D-Garden City), Rep. Tom Suozzi (D-Glen Cove), and Rep. Peter King (R-Seaford), were among the legislators who criticized the repeal of state and local tax deductions as harmful to middle-class New Yorkers.
The Long Island Association, a business trade group, said dropping the deductions would cost Long Islanders more than $2.5 billion.