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Trump Tax Cuts Face Big Hurdles        04/26 06:27

   WASHINGTON (AP) -- President Donald Trump is proposing tax cuts for 
individuals and businesses even as Washington struggles with mounting debt and 
the populist president tries to make good on promises to bring jobs and 
prosperity to the middle class.

   Trump is scheduled Wednesday to unveil the broad outlines of a tax overhaul 
that would provide massive tax cuts to businesses big and small. The top tax 
rate for individuals would be cut by a few percentage points, from 39.6 percent 
to the "mid-30s," said an official with knowledge of the plan.

   Small business owners would see their top tax rate go from 39.6 percent to 
15 percent, said the official.

   The official, who spoke on condition of anonymity, was not authorized to 
speak publicly about the plan before Trump's announcement,

   White House officials already said the top corporate tax rate would be 
reduced from 35 percent to 15 percent. The plan will also include child-care 
benefits, a cause promoted by Trump's daughter Ivanka.

   Trump dispatched his top lieutenants to Capitol Hill Tuesday evening to 
discuss his plan with Republican leaders. The meeting lasted only half an hour.

   Afterward, Sen. Orrin Hatch, R-Utah, called it "a preliminary meeting."

   "They went into some suggestions that are mere suggestions and we'll go from 
there," said Hatch, who chairs the powerful Senate Finance Committee.

   The president's presentation Wednesday will be "pretty broad in the 
principles," said Marc Short, Trump's director of legislative affairs.

   In the coming weeks, Trump will solicit more ideas on how to improve it, 
Short said. The specifics should start to come this summer.

   Short said the administration didn't want to set a firm timeline, after 
demanding a quick House vote on a health care bill and watching it fail.

   However, Short added, "I don't see this sliding into 2018."

   Republicans who slammed the growing national debt under Democrat Barack 
Obama said Tuesday they are open to Trump's tax plan, even though it could add 
trillions of dollars to the deficit over the next decade.

   Echoing the White House, Republicans on Capitol Hill argued that tax cuts 
would spur economic growth, reducing or even eliminating any drop in tax 

   "I'm not convinced that cutting taxes is necessarily going to blow a hole in 
the deficit," Hatch said.

   "I actually believe it could stimulate the economy and get the economy 
moving," Hatch added. "Now, whether 15 percent is the right figure or not, 
that's a matter to be determined."

   The argument that tax cuts pay for themselves has been debunked by 
economists from across the political spectrum. On Tuesday, the official 
scorekeeper for Congress dealt the argument --- and Trump's plan --- another 

   The nonpartisan Joint Committee on Taxation said Tuesday that a big cut in 
corporate taxes --- even if it is temporary --- would add to long-term budget 
deficits. This is a problem for Republicans because it means they would need 
Democratic support in the Senate to pass a tax overhaul that significantly cuts 
corporate taxes.

   Republicans have been working under a budget maneuver that would allow them 
to pass a tax bill without Democratic support in the Senate --- but only if it 
didn't add to long-term deficits.

   Senate Majority Leader Mitch McConnell, R-Ky., said the Senate was sticking 
to that strategy.

   "Regretfully we don't expect to have any Democratic involvement in" a tax 
overhaul, McConnell said. "So we'll have to reach an agreement among ourselves."

   Democrats said they smell hypocrisy over the growing national debt, which 
stands at nearly $20 trillion. For decades, Republican lawmakers railed against 
saddling future generations with trillions in debt.

   But with Republicans controlling Congress and the White House, there is no 
appetite at either end of Pennsylvania Avenue to tackle the long-term drivers 
of debt --- Social Security and Medicare. Instead, Republicans are pushing for 
tax cuts and increased defense spending.

   "I'm particularly struck by how some of this seems to be turning on its head 
Republican economic theory," said Sen. Ron Wyden of Oregon, the top Democrat on 
the Senate Finance Committee.

   Sen. Bob Casey, D-Pa., said, "On a lot of fronts, both the administration 
and Republicans have been contradictory, to say the least."

   "There's no question we should try to reduce (the corporate tax rate), but I 
don't see how you pay for getting it down that low," Casey said. "Fifteen 
percent, that's a huge hole if you can't make the math work."


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