The Trump administration on Wednesday released the outlines of a tax reform plan that includes steep cuts in tax rates but abandons the controversial border adjustment tax that House leaders have been pushing in their own tax blueprint.
The White House plan calls for a huge cut in the corporate tax rate, from 35 percent to 15 percent. That rate would also apply to small businesses known as pass-throughs that file their tax returns under the individual tax code. There would be tax relief for individuals too, including a higher standard deduction for individuals. The proposal would eliminate most itemized deductions, including those for state and local tax payments.
“We want to move as fast as we can,” said Treasury Secretary Steven Mnuchin on Wednesday, adding that the plan would be “the biggest tax cut and the largest tax reform in the history of our country.”
White House officials have not indicated how the tax cuts in their plan would be paid for, but have said they are open to raising new revenue through additional changes to the tax code.
House Republicans who have spent months promoting the border adjustment tax as a means of making tax reform revenue neutral said they want to work with the White House to reach an agreement.
“I think there’s 80 percent or more common ground here – we’ve got some work to do,” Ways and Means Committee Chairman Kevin Brady (R-TX) told the New York Times. “I think the president is going bold here.”
Democrats have already denounced the Trump tax plan for slashing tax rates without regard to the deficit or suggesting any pay-fors. “It is [workable], if you want to blow a hole in the federal budget,” Sen. Sherrod Brown (D-OH) told reporters.