Trump Becomes the Anti-Tax Warrior

H&R Block will not like him very much, the president says, vowing to cut taxes and create jobs

by Jim Stinson | Updated 13 Oct 2017 at 1:46 PM

The Republicans may have failed to pass landmark health care legislation in the Senate, but President Donald Trump is pressing forward on major-league tax reform.

The passage of such reform is crucial to advance Trump’s agenda, but also crucial for congressional Republicans. And, of course, the economy itself is at stake, according to one of the president’s top allies.

After failing to repeal the Affordable Care Act, aka Obamacare, the Capitol Hill Republicans must at least pass tax reform soon — or face great doom in the 2018 midterm elections. The Republicans control the House and Senate now, and the prospect of Democrats taking one of those chambers in November 2018 has motivated Trump to step up his tax-reform push.

"We need to get [tax reform] sooner rather than later so that there's strong economic growth ASAP," said Grover Norquist, president of Americans for Tax Reform, in a call to LifeZette. "And for political reasons, so that everyone sees it and notices it long before the 2018 elections."

Behind the scenes, Norquist and other Trump allies are working Congress hard. Meanwhile, the White House is selling the cuts to the public. On Wednesday night, Trump flew into Harrisburg, Pennsylvania, where he promised the biggest change to the tax code since former President Ronald Reagan's massive tax reform in 1986. It was the last major change to the tax code.

"We will cut taxes for everyday, hardworking Americans," said Trump, speaking to a crowd that included many truck drivers. "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. And remember, you'll do your tax on a single piece of paper. H&R Block will not like Donald Trump very much . . . They will not like me at all. And that's OK."

Trump's rhetoric in Pennsylvania was an indication he will fight hard for tax reform — with or without Democratic help. And he will be a warrior for tax reform. It's likely well-received news in the Republicans ranks in Congress, many of whom felt Trump did not sell Obamacare repeal hard enough.

Trump is also trying to motivate small business, which often gets overlooked by discussions on the corporate tax rate. Noncorporate small businesses will be able to get a tax cut too, he promised.

"For the many American truckers who file taxes as sole proprietors, S corporations, or partnerships, we will cap your top tax rate at a maximum of 25 percent, substantially lower than what you're paying now," Trump told truck drivers in Harrisburg. "The more than 30 million Americans who have small businesses will see — listen to this — a 40 percent cut in their marginal tax rate — 40 percent. I wouldn't want to be a politician against that. They're going to have a long, hard winter."

The Republican tax plan would decrease the personal tax rates to three, from seven: 12 percent, 25 percent and 35 percent. It doubles the standard deduction to $24,000 for married couples and $12,000 for single filers, according to CNN. And it cuts the top corporate tax rate to 20 percent, down from 35 percent. Noncorporate businesses will get a similar cut, down to 25 percent, from a top rate of 39.6 percent.

Trump seemed especially excited that his tax reform would cut the top rates to modern lows.

"This will be the lowest top marginal income tax rate for small and mid-sized businesses in more than 80 years." Trump said. "Not since 1931 have they had taxes anywhere near that level, right?"

Democrats, not surprisingly, were quick and eager to push back, especially on Trump's claim that the reform package could lead to $4,000 more in household income.

"I have not seen any evidence that even comes remotely close to that suggestion," said Rep. Richard Neal (D-Mass.), the top Democrat on the House Ways and Means Committee, speaking to The Hill on Wednesday.

Even Trump's allies at the conservative website Breitbart are complaining that the reform's removal of deductions would hit many middle-class families. Instead of $4,000 in savings, a middle-class household affected by the removal of deductions could see a net tax increase of $200 a year, wrote Breitbart staffer John Carney on Thursday morning.

But Trump told the Pennsylvania truckers that the middle class will benefit, and there will be job-creation benefits to consider.

"The biggest winners from this transformation will be everyday families, from all backgrounds, from all walks of life, and our great companies, which will produce the jobs," said Trump. "They are going to produce jobs like you've never seen before."

Norquist said the economy's surge cannot be taken for granted, and that items such as full-business expensing need to be incorporated into the tax package.

"We've been getting some economic growth because Hillary [Clinton] lost and all of the regulations that were going to happen ... didn't," said Norquist. "So the economy grew. But then we also have bad problems with the hurricanes. This makes it all the more important that we hurry up [and pass tax reform] and the pro-growth tax reductions, [and adopting] going to full business expensing."

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