President Trump, in an October 11 speech in Harrisburg, Pennsylvania, focused on the message that his primary goal in pursuing tax cuts and reform is to help middle-class taxpayers. In contrast to Democratic lawmakers’ claims that tax reform efforts by the GOP are geared toward the wealthy, Trump and his administration have consistently said middle-income earners are the focus for tax relief—a stance Trump reiterated Wednesday evening.
“Throughout the year, my administration has worked closely with Congress to develop a framework for tax reform that will deliver exactly that—more jobs, higher pay and lower taxes for middle-income families, and for American businesses of all size,” Trump said. “Under our framework, the first $12,000 for a single individual, and the first $24,000 for a married couple, will be tax-free; no tax at all,” he added.
Trump criticized Democrats for not including the “zero tax rate” for taxpayers who will pay no tax under his plan, instead only mentioning the proposed three rates of 12, 25 and 35 percent. “Under our framework, we make the zero bracket bigger, and get rid of the 10-percent bracket, and we’re reducing the 15-percent rate down to 12 percent.” Trump also stated that the average middle-class family would see its income increase by $4,000 because of his tax reform plan. He was unclear, however, how much of that estimate was attributed to economic and wage growth triggered by his tax plan and how much of that estimate would be due to direct tax-rate reductions and other tax benefits to middle-class taxpayers.
Additionally, Trump said the Republican tax reform framework proposed a $500 credit for adult dependent or elder care, and will “substantially increase” the child tax credit. “We know that by making the individual tax code simpler and fairer, and by making our business tax rates more competitive, we will deliver tax reform that Americans deserve, but which they have not had in over 30 years,” Treasury Secretary Steven Mnuchin said in a statement released after Trump’s speech.
House and Senate Democrats remain largely united in their opposition of Republican efforts toward tax reform as outlined by the Trump/GOP Framework. According to Senate Finance Committee (SFC) ranking member Ron Wyden, D-Ore., the Trump/GOP tax plan raises taxes for the middle class. “Not the tax cuts Trump is claiming,” Wyden said in a tweet.
By Jessica Jeane, Wolters Kluwer News Staff
Treasury Department News Release, TDNR SM-0174