Republicans Calling For Deep Cuts In Both Individual And Corporate Tax Rates

President Trump and Republican leaders in Congress unveiled their framework for a tax code overhaul, but many details still have to be negotiated.

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President Trump and congressional Republicans want to rewrite the federal tax code. Congressional leaders released an outline of their plan today, and President Trump promoted it at the Indiana State Fairgrounds.

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PRESIDENT DONALD TRUMP: We want tax reform that is pro-growth, pro-jobs, pro-worker, pro-family and, yes, tax reform that is pro-American.

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CHANG: Republicans are calling for deep cuts in both individual and corporate tax rates in an effort to rev up the economy. But Democrats quickly denounced the plan as a giveaway to the rich that would explode the federal deficit. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: The plan, if passed, would be the most thorough overhaul of the tax code in more than three decades. Republicans want to cut the top individual tax rate from nearly 40 percent to 35 while cutting the corporate rate from 35 percent to 20. Republican House Speaker Paul Ryan calls this a now-or-never moment.

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PAUL RYAN: Today we are taking the next step to liberate Americans from our broken tax code. This unified framework delivers a new tax code that is simple, that is fair, that is pro-growth and pro-family.

HORSLEY: The plan would nearly double the standard deduction so more people could escape taxes altogether. And many who do have to pay would enjoy simplified filing. President Trump is framing the plan as a boost for the middle class.

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TRUMP: The biggest winners will be the everyday American workers as jobs start pouring into our country, as companies start competing for American labor and as wages start going up at levels that you haven't seen in many years.

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HORSLEY: But many Democrats complain this plan is just the latest iteration of trickle-down economics, offering a mere trickle of savings for middle- and working-class taxpayers along with a gusher of breaks for those who are already wealthy. The plan would eliminate the estate tax and the alternative minimum tax which hit only those at the upper end of the income ladder. Democratic Senate Leader Chuck Schumer says wealthy taxpayers also have the most to gain from the individual and corporate rate cuts.

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CHUCK SCHUMER: Under this plan, the wealthiest Americans and wealthiest corporations make out like bandits while middle-class Americans are left holding the bag.

HORSLEY: Many of the details of the plan still have to be filled in by congressional tax writing committees, and GOP leaders did leave the door open for a higher individual tax rate if that's what it takes to prevent the wealthy from shifting their own tax burden onto others. The proposed tax cuts would drain trillions of dollars from government coffers over the coming decade. Trump and his fellow Republicans are counting on faster economic growth to make up for some of the lost revenue. But fiscal watchdog Maya MacGuineas of the Committee for a Responsible Federal Budget is dubious.

MAYA MACGUINEAS: One thing is clear - that this is a massive tax cut with an insufficient plan to pay for it. One thing politicians don't seem willing to do right now is pay for things or make any hard choices.

HORSLEY: Backers of the tax plan also expect to raise revenue by closing tax loopholes. But so far, one of the only tax breaks they've identified for elimination is the deduction for state and local taxes, a move that would be especially costly for people in high-tax blue states. Other popular deductions for mortgage interest and charitable giving are expected to survive.

GOP lawmakers are prepared to pass their tax plan on a strict party line basis, but Trump is trying to woo some Democratic support. Democratic Senator Joe Donnelly joined the president at the event in Indiana this afternoon. Donnelly is 1 of 10 Democrats running for re-election next year in states that Trump carried. If the president can win backing from at least a few of those for the tax plan, that would offer an insurance policy against the kind of GOP defections that doomed the health care bill. Scott Horsley, NPR News, Washington.

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