President Trump to unveil his tax plan today

Senate Finance Committee arriving for a hearing on tax reform last week. Credit Aaron P. Bernstein  Getty Images

Senate Finance Committee arriving for a hearing on tax reform last week. Credit Aaron P. Bernstein Getty Images

Very little is now known about the specifics of what the Republican "Big Six" tax reform negotiators are planning, and without knowing what is in the big picture, it is impossible to predict how the tax plan will affect families. The only meetings listed on his schedule were a lunch with Vice President Mike Pence and dinner with "grassroots leaders" - a group that will include several conservative organizations. "Until New York completely overhauls its tax code, removing this provision will strip primarily middle- and low-income New Yorkers of their only real tax relief".

It would cut the top individual income tax rate from 39.6 percent to 35 percent and slash the corporate rate from 35 percent to 20 percent.

In addition to doubling the standard deduction, the president promised simplified return filing, a lower corporate tax rate that would encourage job growth and a policy change that would return up to $3 trillion in corporate profits to the United States.

Trump wants to simplify the thousands-of-pages-long tax code, cut income taxes "not just a little bit, but tremendously" for the middle class, cut the corporate rate to as low as 15% and "bring back trillions of dollars in wealth" from U.S. firms "parked overseas".

"I don't have a good way to thread the needle between the president's promises and where they are", said Republican economist Doug Holtz-Eakin.

Republicans argue that the tax cuts would be offset by new revenues raised from eliminating tax loopholes and would drive more robust US economic growth, predictions that critics are sure to question.

Trump emphasized the benefits for lower earners Sunday.

"Raising the bottom rate from 10% to 12% doesn't come anywhere near paying for those tax cuts, but it's one of what will be many ways they will try to pay for the tax cuts".

"We will cut taxes tremendously for the middle class - not just a little bit, but tremendously", Trump told reporters ahead of the meeting. "We're coming back with this after taxes", said Senator Lindsey Graham, (R) SC.

It's not the low rate of 15 percent that Trump had initially proposed, an idea that drew sharp skepticism even among Republicans in Congress.

Trump's preferential rate for business income is unprecedented. And they note that the highest income households tend to benefit most from the state and local deduction.

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Attempts to end it may run into Republican opposition too. They would pay at a 25 per cent rate, down 39.6 per cent.

Trump's comments reflect a growing consensus between the White House and congressional negotiators about precisely what the GOP tax reform plan will entail.

Any changes "should benefit loyal, hardworking Americans and their families", according to Trump.

Rep. Richard Neal of MA, the top Democrat on the Ways and Means Committee, came away from the White House meeting in a negotiating mood. That our moron billionaire leader might take an action that would help the sort of people who make up his entire cabinet and social circle and family! The administration is leaving the income limits to accompany those brackets up to the House and Senate tax-writing committees. Nor will his panel be a "rubber stamp" for any particular plan, Hatch said.

"We have a non-competitive tax structure right now and we're going to go super competitive", he continued.

Analysts have warned that huge tax cuts would balloon the federal deficit and debt if the economic growth projected by Republicans fails to materialise amid rising interest rates.

Republicans will say that the tax cuts, widely leaked to the media by a variety of sources in recent days, would be offset by new revenues raised from eliminating tax loopholes, although few if any of those are expected to be named in the plan. While only about one in 500 Americans are wealthy enough that their estates pay the estate tax, 13 of the 24 members of Trump's cabinet qualify. Many Republicans want to end it. An agreement was reached in the Senate to pass a $1.5 trillion budget plan, which is necessary to move on to tax reform.

In other words if the Republicans pass this version of massive tax cuts for the rich it is only a matter of time before the discriminated-against corporate executive class, who earn their millions through good old-fashioned pay checks, will be clamoring for a new tax cut so that they should not be placed at a disadvantage to their hedge fund-running neighbors.

Time is short, and many details have yet to be resolved.

Mr. Trump teed up the tax reform plan with previous events in the home states of two other Senate Democrats whose vote are in his crosshairs: Sen. It will be left to Congress to create safeguards that prevent wealthy individuals from incorporating as pass-through businesses, which would tax their income at a lower rate.

"Our goal in the House is as much permanency as possible and we know to achieve that you need revenue neutrality", Curbelo said.

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