President Donald Trump urged Congress to give Americans a big holiday gift this month by passing the largest tax cuts and tax reform since 1986.
“We want to give you, the American people, a giant tax cut for Christmas,” said Trump, speaking to TV cameras and a small gathering inside the White House. “When I say giant, I mean giant.”
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Trump was actually pitching his plan to a small group of congressional negotiators, who are working out differences between the House and Senate tax reform bills passed earlier this year. Once House and Senate negotiators have agreed on the bill, it will go back to the two chambers for a final vote.
Trump intended for his brief Wednesday afternoon speech to nudge negotiators along. A final vote is expected in both chambers of Congress next week; then the bill will head to Trump for his signature.
There are many reasons Trump is eager to get the bill. After two failures in the summer to repeal the Affordable Care Act, Trump and Republican leadership yearn to end 2017 with at least one landmark legislative accomplishment.
Related: GOP Confident the ‘Bama Win by Dems Won’t Derail Tax Cuts
The $1.5 trillion tax cut, spread over 10 years, will likely satisfy that yearning.
Whatever Trump ultimately signs, the measure won’t just be a tax cut. It will also be the largest code reform since the Tax Reform Act of 1986.
The top corporate tax rate — now the highest of major industrialized nations — will be dropped from 35 percent to 20 percent or possibly 21 percent. Unincorporated businesses will also see a tax cut, from the top individual rate of 39.6 percent to about 25 percent.
For individuals, the top rate will likely be dropped to 37 percent, from 39.6 percent.
But on tax simplification, the individual plans are different in the House and Senate plans. There are seven brackets in the Senate bill, and only four in the House measure. The Senate bill does lower the rates for most filers.
Related: Trump: Tax Cuts Will Be ‘Rocket Fuel’ for Economy
Another major reform is the elimination of state and local tax deductions. The deductions allow some relief to taxpayers in high-tax states such as California and New York — but the deduction also helps subsidize those high-tax states, masking the true cost of big state governments, according to the New York Post.
Without the deduction, some taxpayers could see a net tax increase, something Republicans admit. But as Grover Norquist, president of Americans for Tax Reform, told LifeZette this week, the reform bill will be the first crack at tax code reform, not the last.
Trump was ready to start the process, saying a family of four earning $75,000 annually would save $2,000. Trump said he promised such tax cuts in the 2016 campaign.
“We are just days away from keeping that promise and delivering a truly amazing victory for American families,” the president said.
PoliZette White House writer Jim Stinson can be reached at [email protected] him on Twitter here.
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