White House Exploring 2020 Middle-class Tax Cut
A similar tax cut was discussed prior to the 2018 midterm elections
White House advisers are discussing whether President Donald Trump should propose a 15 percent tax rate for middle-class Americans as part of his reelection campaign. Trump and congressional Republicans faced criticism for passing a 2017 tax law that permanently lowered corporate tax rates but allows tax cuts for individuals and families to expire in a few years.
Larry Kudlow, director of the White House National Economic Council, is leading the administration’s discussions on a second round of tax cuts for 2020.
“[Trump] wants to afford as much relief and simplicity as possible for middle-income taxpayers,” Kudlow told The Washington Post.
Kudlow added that a 15 percent tax rate for the middle class “sounds like a pretty good idea to me.”
The White House earlier this year floated a possible payroll tax cut and changes to how capital gains are taxed, and those ideas might still be play, according to the president’s economic advisers. Just before the 2018 midterm elections, Trump also promised a 10 percent middle-class tax cut but dropped the idea after the election.
Reducing the tax rate to 15 percent might encourage consumer spending but would undoubtedly add to the growing deficit unless the cuts were offset by spending reductions to federal programs. The 2017 tax law added more than $1.5 trillion to the federal deficit.
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