President Trump has scrapped his tax plan that he campaigned for weeks on and is now back to the drawing board. He needs a Republican consensus that will allow him to overhaul the U.S. tax system and create budgetary cuts. So far, he has yet to succeed in any of his promises from the recent election – and taxes might be yet another failure for his administration.
Trump Promises an August Delivery
While skepticism grows over the tax plan, Trump still promises that it will release by August.
Increasing nervousness over the stock market and GOP tax reform is not helping the administration. However, this was a central promise to voters that Trump must fulfill to see better ratings from the public.
Businesses and stock markets are looking for reassurance that tax reform will happen; therefore, they assume that President Trump will show more activity in the reform sector. They are hoping Trump will demand a bill on his desk no later than August 1, reports The Hill.
The administration started their plan in the early stages of their administration, but none of the details were released. However, some of the proposals theorized were highly unorthodox, including cutting payroll taxes.
Administration officials state it is unlikely a tax reform will occur before the August deadline, however, Trump still moves quickly past each blockade to try and reach his goal.
Learning Lessons from Failed Healthcare Reforms?
So far, Trump’s administration is still licking their wounds from their failed health care reform attempt. White House aides are working on passing tax legislation that will please the Democrats and Republicans, and they have had listening sessions with both parties to get ideas.
The White House is taking an active role in tax reform, especially because the hands-off approach from healthcare reform failed to produce results.
Taxes for the Rich?
The White House says their goal is to cut tax rates so that the economic picture turns upward. However, that means low and mid-income ranges might pay more in taxes, while the higher earners receive better tax cuts. Trump’s proposal is that better taxes for the rich turnaround and benefits the poor.
Trump is a famous deal-maker, so he will have to cut his tax reform in particular places if he wants to please both sides of the House.
A bipartisan agreement is likely on business tax reform because lowering rates for businesses will bring higher revenue, growth, and more jobs. Trump has suggested that $1 trillion in capital could happen if they were to create a 10 percent repatriation tax for businesses.
Infrastructure spending is one that will win Democrats over – if deployed correctly. Democrats want to see improved infrastructure, and building and industrial unions do too. Trump needs to create an infrastructure fund in his tax reform plan if he wants Democrats to sign off on the new scheme.
Right now, the group is hitting a roadblock with finding alternative ways to fund Social Security, because they want to cut corporate tax rates and payroll taxes – which are Social Security’s initial funding.