STOCK MARKET BSE NSE

GOP budget hawks open to Trump tax plan despite deficit

Republicans who slammed the growing national debt under Democrat Barack Obama said Tuesday they are open to President Donald Trump's tax plan.

Published: 26th April 2017 03:14 AM  |   Last Updated: 26th April 2017 03:14 AM   |  A+A-

Treasury Secretary Steve Mnuchin smiles while speaking to the media during the daily briefing in the Brady Press Briefing Room of the White House in Washington, Monday, April 24, 2017. | AP

By Associated Press

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

Trump is scheduled to unveil the broad outlines of a tax overhaul Wednesday that includes a massive cut in the corporate income tax, reducing the top rate from 35 percent to 15 percent. The plan will also include child-care benefits, a cause promoted by Trump's daughter, Ivanka.

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

"I'm not convinced that cutting taxes is necessarily going to blow a hole in the deficit," said Sen. Orrin Hatch, R-Utah, chairman of the Finance Committee.

"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 blow.

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.

The assessment was requested by House Speaker Paul Ryan, R-Wis., who has been pushing a new tax on imports to fund lower overall tax rates. Senate Republicans have panned the idea, and officials in the Trump administration have sent mixed signals about it.

The import tax is not expected to be part of Trump's plan.

Trump dispatched his top lieutenants to Capitol Hill Tuesday to discuss his plan with Republican leaders. No Democrat was invited.

"Today's Democratic Party seems to be preoccupied with wealth transfer from those who have done well to those who have done less well," said Senate Majority Leader Mitch McConnell, R-Ky. "That's unrelated to having a set of tax laws that promote growth."

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.

McConnell 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."

The Trump administration on Tuesday stuck with its assertion that tax reform could push economic growth above 3 percent. Commerce Secretary Wilbur Ross said that the combination of changes on taxes, trade and regulations being pushed by the administration would accelerate the pace of economic gains.

"There is no reason that we should not be able to hit that — if not beat it," Ross said at the White House news briefing.

Many economists are skeptical that growth could consistently eclipse 3 percent. The flow of workers into the U.S. economy has slowed because of retirements by an aging baby boomer population, while improvements in productivity have been sluggish.

Officials with the Federal Reserve estimate that the economy will grow at a 2.1 percent clip this year and at 1.8 percent in the longer run.



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

IPL_2020
flipboard facebook twitter whatsapp