Right behind banning Muslims from entering the country and promising to build a wall along the U.S.-Mexico border, President Trump made tax reform a key component of his presidential campaign. He made big promises of cutting taxes for everyone, including middle- and low-income Americans, but provided very little information about how he was actually going to accomplish this.
Since taking office, Trump has released a couple different versions of his tax plan, all of which were severely lacking in detail. A new and supposedly more fleshed-out version is set to be released on Wednesday. Ahead of this release, on Tuesday, Trump spoke to the press about his plan, which he described as “very powerful” and the “biggest tax cut in history.”
Trump made these comments during a meeting with several members of the House Ways and Means Committee, including its chairman, Rep. Kevin Brady (R-Texas) and the committee’s top Democrat, Rep. Richard Neal of Massachusetts. Vice President Mike Pence, Treasury Secretary Steve Mnuchin, and White House economic adviser Gary Cohn — who are all expected to play a big part in the Trump administration’s planned overhaul of the tax system — also attended the meeting.
Although the full plan has not yet been released, insiders have leaked certain aspects of it, including the administration’s desire to lower the top individual tax rate from 39.6 percent to 35 percent and increase the tax rate for individuals in the bottom tax bracket from 10 percent to 12 percent.
Many people have, naturally, been troubled by this proposed rate increase, although it would presumably be offset by the administration’s plan to double the standard deduction.
Currently, someone who makes between $0 and $9,325 per year pays in the 10 percent tax bracket and takes a standard deduction of $6,350. Under the new plan, the rate would increase to 12 percent, but the standard deduction would also increase to $12,700.
A White House representative told Business Insider about Trump’s plan to increase the standard deduction:
‘It’s important to note that by increasing the standard deduction…we’re effectively increasing the size of the 0% tax bracket, so that the hardworking American at the bottom of the economic ladder is empowered to climb their way up.’
On Tuesday, Trump emphasized that his administration plans to “make our tax code simple and fair” because it’s currently “too complicated.” He also said that, as a result of his plan, the majority of Americans will be able to file their taxes on a single page.
Rep. Brady praised the plan on Tuesday. He told reporters that it will lay out “pro-growth tax reform,” repair a tax code that is “so complex, so costly and so unfair,” and “deliver the lowest tax rates on businesses in modern history.”
He also acknowledged gaps in the current plan but said that the Ways and Means committee will fill them in later.
Trump will be promoting the new plan in Indianapolis on Wednesday, and Pence is expected to hold events in Michigan and Wisconsin on Thursday with business leaders.
Watch Trump talk about the plan in the video below, available via YouTube.