WASHINGTON — Administration officials on Wednesday unveiled the broad strokes of President Donald Trump’s plan to overhaul the tax code, touting “one of the biggest tax cuts in the American history.”
The outline sketches what Treasury Secretary Steven Mnuchin said is a return to a central theme of Trump’s presidential campaign: lifting up the middle class by creating jobs and economic growth.
Democratic leaders on Capitol Hill immediately denounced the plan as most beneficial to the wealthy.
Mnuchin and National Economic Director Gary Cohn told reporters at the White House that the administration hopes to work with both parties, but has the advantage of a Republican-controlled House and Senate.
“The president is going to seize this opportunity by leading the most significant tax reform legislation since 1986 — and one of the biggest tax cuts in the American history,” the treasury secretary said.
Mnuchin acknowledged a lack of details in the blueprint, which was released in the final stretch of Trump’s first 100 days in office and contained several proposals already put forth by Trump’s team. “The core principles of this we have agreement on, and we will work forward on the details,” Mnuchin said.
To offer relief to individuals, Trump seeks in part to reduce the tax brackets from seven to three — 10 percent, 25 percent and 35 percent — and double the standard deduction. The top tax rate is now 39.6 percent. But the administration has not said which incomes would fall into which tax brackets.
The plan would preserve tax breaks for mortgage interest and charitable giving but would ax nearly all other deductions, including those for local and state taxes.
To boost businesses, the president would drop the top corporate tax rate to 15 percent from 35 percent and levy a one-time tax on overseas profits, among other changes. Both major corporations and small businesses stand to benefit from the lower threshold.
The one-page outline distributed to reporters made no mention of whether it would increase the federal deficit. The Joint Committee on Taxation on Tuesday said a large corporate tax cut would add to budget deficits.
The issue is important because the administration would require Democratic support for any longer-term policy that hikes the debt above its baseline.
Asked whether Trump’s plan is revenue-neutral, Mnuchin did not say yes. “We’re working on lots of details as to this,” he said. “This will pay for itself with growth and with reduction of different deductions and closing loopholes.”
Trump’s plan, as presented by Mnuchin and Cohn, does not include the “border adjustment tax” on exports and imports that Ryan and the House GOP included in their blueprint to offset the cost of the tax cuts.
Trump was not present at the announcement, but said at another event: “It’s a great plan. It’s going to put people back to work.”
House Speaker Paul Ryan (R-Wis.) said the administration’s plans are “basically along exactly the same lines” as that of House Republicans.
“We see this as a good thing,” he told reporters at the Capitol.
House Minority Leader Nancy Pelosi (D-Calif.) said the outline featured tax cuts for the wealthy and few breaks for the middle class, criticizing it as “trickle-down economics” but saying there is room for bipartisan tax reform.
“True to form, President Trump’s tax plan is short on details and long on giveaways to big corporations and billionaires,” she said in a statement.
Senate Minority Leader Chuck Schumer (D-N.Y.) predicted the average taxpayer will reject the plan.
“Clearly, the president and those at his level of wealth would benefit while tens of millions of American families are hurt,” he said in a statement.
Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, questioned how the plan will be funded. “We have to recognize the simple facts that tax cuts are not the same as reforms, nor do tax cuts pay for themselves,” she said.