White House Still Planning New Tax Cut Plan
Further reducing tax rates would add to the growing deficit
White House National Economic Council Director Larry Kudlow said that President Donald Trump will unveil a new “tax cuts 2.0” proposal this summer as he campaigns for reelection.
Kudlow did not provide specifics about the plan but said the goal will be to “help middle-class economic growth.” The White House has met with Rep. Kevin Brady (R-TX), the top Republican on the House Ways and Means Committee who helped usher in the 2017 tax law. That law cut the corporate tax rate to 21 percent permanently and individual tax rates until 2026. Making the individual tax cuts permanent is widely considered to be part of Kudlow’s plan and lower capital gains tax rates could also be in the mix.
Passage of another tax cut plan would likely hinge on whether Republicans are able to regain the majority in the House and maintain their Senate majority. Just before the 2018 midterm elections, Trump also promised a 10 percent middle-class tax cut but dropped the idea after Republicans lost the House.
Reducing the individual tax rate to 15 percent might encourage consumer spending but would 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.
This article was provided to OSAE by the Power of A and ASAE's Inroads.