Trump’s New Pledge to Cut Taxes May Follow a Familiar Path

Trump’s New Pledge to Cut Taxes May Follow a Familiar Path

The president has suggested a more aggressive and certain timetable in public. He has promised that the cuts would be “put in place” in the next week. He told interviewers from The Wall Street Journal on Tuesday that “we can make it revenue neutral,” meaning that the lost revenues from the tax cut would be offset by either spending cuts or tax increases. He has said repeatedly that the cut would be for the middle class only.

It has been an unorthodox chain of events, particularly since Mr. Trump could be spending his time promoting the middle-class benefits of the law he signed last year.

The law signed in December will provide a roughly 10 percent cut in tax liability, on average, in 2019 for households earning $30,000 to $75,000 a year, according to the congressional Joint Committee on Taxation. (Median household income was just over $61,000 last year, according to the Census Bureau.)

The independent Tax Policy Center in Washington estimates that households in the middle quintile of taxpayers will see, on average, a $930 tax cut from the law this year. The cut for higher earners is larger as a share of income, and overwhelmingly larger in dollar terms: Households earning $100,000 or more will combine to see $219 billion in tax cuts next year, the joint committee estimates, compared with about $40 billion for those earning $75,000 or less.

But with the tax cut consistently failing to attract support from a majority of Americans, Mr. Trump has taken to talking about new cuts, which could mean, eventually, that congressional Republicans will try to turn them into a bill.

“This administration, the president has an idea, he gives voice to it,” said Rohit Kumar, a former adviser to Senator Mitch McConnell of Kentucky, the majority leader, who now leads the Tax Policy Services group for PwC. Often, he said, the result is, “If it sells, eh, we’ll pursue it.”

(Original source)