It’s finally happening! The long-awaited tax reforms are coming! Part of that reform is cutting tax cuts for the wealthy.
The “Big Six” framework, as the tax code is being called, was worked out between 6 top Republicans. Democrats are not going to happy. In fact earlier this month dozens of them penned a letter to the POTUS and the GOP.
45 of the 48 members of the Senate Democratic Caucus urged the GOP not to use arcane budget reconciliation procedures to shield any tax reform bill from a filibuster. As the Obamacare repeal effort fell apart, some Republican senators began calling for the inclusion of Democrats on a bill that could win 60 votes.
President Trump is planning to give a speech unveiling the Big Six framework in Indiana on Wednesday, three sources said. The framework is the starting point for the tax reform process. It reflects the shared view of the Big Six, but it will inevitably change substantially as it goes through the normal legislative processes in the House and Senate.
(The “Big Six” are House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Treasury secretary Steven Mnuchin, White House economic adviser Gary Cohn, and the chairmen of the two tax-writing committees — Senate Finance Committee chairman Orrin Hatch and House Ways and Means chairman Kevin Brady.)
The details, per three sources with knowledge of the plan:
Top individual tax rate cut from 39.6 to 35. The current seven income tax brackets collapsed to three, as part of simplification. (Axios hasn’t obtained the other two rates.)
Axios can confirm that the Big Six agreed to cut the corporate tax rate from 35 percent to 20 percent. That key detail leaked last night to the Washington Post. (Trump has said he wants the corporate rate to be 15 percent.)
The Big Six framework is also expected to include guardrails to prevent wealthy people from artificially lowering their income taxes by rearranging their affairs to get taxed at the small business rate.
We can confirm, too, WashPo’s reporting that Republicans plan to double the standard deduction — a boost for the middle class and a key component of simplification.