Congress headwinds are buffeting President Donald J. Trump's plan to accelerate legislative activity in anticipation of new president's 100th day in the Oval office. Trump has plans to release a tax reform plan outline. Republican Congressional leaders said that there is no rush to move any tax bill. This sentiment is echoed by the House tax committee chairman. The latter holds the opinion that this project will take at-least a year to fructify.
Tax code simplification
White House officials steadfastly refused to discuss any plan details. They however confirmed that President Trump wants to slash corporate tax rate to 15 percent. This was the figure he promised to the electorate during the 2016 presidential campaign. The proposal related to campaign tax asked for the simplification of tax code. It also created a new and also lower tax brackets. These are 10 percent, 20 percent and 25 percent for individuals. There is also zero for the low income filers. The president is unlikely to provide any kind of details or draft a legislation to implement such cuts. Congress has expressed concern about tax cuts prospects sans budget cuts or extra revenues.
Not adding up
Senator Orrin Hatch, a Republican lawmaker from Utah, and the State Finance Committee chairman, said that although he is not opposed to any kind of tax cuts, the specter of slashing corporate taxes to 15 percent would be extremely aggressive. He said that even though he believes that tax cuts will stimulate US economy and get it to move, it is important to find out whether 15 percent is the right amount or not. Well known Republicans like Paul Ryan and Kevin Brady, the House Speaker and Representative from Republican Texas and House Ways and Means Committee chairman respectively, are of the opinion that tax revenues should be “revenue neutral”. It means that the revenue will not be increased.
Steven Mnuchin, the Treasury Secretary and a number of other Trump officials, said that there exists a plan to finance such tax reforms with a yearly three percent economic growth. Senator Ron Wyden, a Democrat and Hatch's Democratic counterpart from Oregon, questioned whether the mathematics shown in the projections were correct. He said that the idea of cutting the tax code by billions of dollars, and hoping that it will be adjusted due to economic growth is impossible to be conceived of by any analyst.