WASHINGTON – President Trump, House Speaker Paul Ryan (R-Wis.) and Republicans today unveiled the first major tax code overhaul in more than 30 years with a plan they claim will put more money in the pockets of hardworking American families.
Democrats immediately ripped the plan, with Sen. Bernie Sanders (I-Vt.) calling the Republicans’ “obscene” proposal to repeal the estate tax a $269 billion break for the nation’s top 0.2 percent.
Trump discussed the proposal during an appearance in Indiana, where he called tax reform a once-in-a-generation opportunity while adding that taxes are something he’s very good at.
“I’ve been waiting for this for a long time,” Trump said. “We’re going to cut taxes for the middle class, make the tax code simpler and more fair for everyday Americans, and we are going to bring back the jobs and wealth that have left our country and most people thought left our country for good.”
Some of the highlights of the proposal, as outlined by Ryan, include dropping the corporate tax rate from about 35 percent to 20 percent. To “boost the economy,” Republicans propose allowing businesses to immediately write off the cost of “new investments,” with a five-year sunset. The GOP also proposes doubling the standard deductible to $12,000 for individuals and increasing the Child Tax Credit, while eliminating several itemized deductions that have enabled the wealthy to exploit the tax code.
Ryan, during a press conference with Republicans from the Senate Finance Committee, the House Ways & Means Committee and others, echoed Trump’s comments, saying the president has a unique opportunity to add jobs, create a fairer, simplified tax code and create larger paychecks for Americans.
“Instead of a source of pride, our tax code has become a constant source of frustration,” Ryan said. “It’s too big. It’s too complicated. It’s too expensive. Today, we are taking the next step to liberate Americans from our broken tax code.”
Ryan has repeatedly boasted that the tax plan will mean Americans completing their tax filings on forms the size of a postcard.
Sanders in a statement called Trump’s tax plan a “morally repugnant and bad economic policy.” Instead of giving tax breaks to billionaires, he said, the U.S. should be making its best effort to “rebuild the disappearing middle class.”
Rep. Dan Kildee (D-Mich.) in his own statement also railed against the Republicans’ proposed estate tax repeal, which he said would deliver a $269 billion break to 5,400 billionaire families, including the Trumps and DeVoses. He added that the plan would require middle-class families to pay more through increases in state and local taxes.
Senate Majority Leader Mitch McConnell (R-Ky.) discussed the tax proposal today on the Senate floor, where he blamed the Obama administration for eight years of sluggish economic growth and a tax code that has left Americans struggling “to get ahead.”
“It’s a refreshing change from our current, outdated tax code, which for too long hasn’t worked for many Americans,” McConnell said. “The current code forces individuals, families and small businesses to navigate a web of schedules, deductions and penalties. Rates are too high. Incentives often make little to no sense. Some actually encourage companies to ship American jobs overseas.”
The plan would ultimately shrink the existing tax code’s seven brackets into three: 12 percent, 25 percent and 35 percent. Ryan said there’s an option to add a fourth, top bracket, so that “the wealthy do not contribute a lower share of taxes paid than they do today.”
The plan also repeals the Death Tax and the Alternative Minimum Tax, while implementing a cap for small and family-owned business tax rates at 25 percent. Other highlights that Ryan called attention to include “a one-time, low tax rate on wealth that has already accumulated overseas so there is no tax incentive to keeping the money offshore.”