President Donald Trump has started plans to cut tax rates for corporations and individuals stating it would boost hiring across the country. Calling it a revolutionary change, he said that it would make jobs pour back into the country as well as become 'the largest tax cut in our country's history.' The plan was released after a month long negotiation between administration officials and top Republican lawmakers on Capitol Hill. He now hopes that the populist wave will provide further momentum to it.
According to the proposal, the corporate tax rate would be slashed to 20 percent from the current 35 percent, thereby reducing a tax burden for pass-through entities like partnerships and limited liability companies. Trump feels it would trigger an economic boom as small businesses and farms would be passed more easily within families as well as leave middle-class Americans with more money in their pockets. He stated that Indiana's resurgence in manufacturing evidenced the benefits of tax cuts to middle-class families. He further stated that the tax cuts and deregulation under vice president Mike Pence provided a 'powerful competitive edge.' After assuming the governor's office in Indiana in 2013, Pence had been steadily reducing its tax and the state has flourished because of it. His first tax cut in May 2013 boosted manufacturing employment in Indiana to grow to 8.5 percent from 4 percent though overall employment in Indiana was slower in comparison to other states as 7 percent against 7.8 percent national average in the same period.
A major Trump's presidential campaign promise, the tax overhaul faces a major fight in Congress as lawmakers remain divided on critical elements of the framework released by the White House. Senate Finance Committee Chairman Orrin Hatch, a Utah Republican had openly refused to make his committee, a 'rubber stamp' for the plan while Democrats call it a giveaway for the rich. In an email statement, Senator Bernie Sanders, an independent candidate stated that the rich should not be providing hundreds of billions of tax relief presently and called the bill to repeal the estate tax particularly obscene'.
The new Republican framework proposes three tax brackets of 12 percent, 25 percent and 35 percent for individuals from the current top of 39.6 percent. It also proposed doubling the standard deduction and substantially increasing the child tax credit while eliminating other tax loopholes. However the administration has not disclosed which deductions would be erased, fueling concerns that the changes might disproportionately advantage the wealthy.
Supporting Trump on this, Senator Joe Donnelly, an Indiana Democrat who faces re-election next year joined Trump on Air Force One for the flight from Washington as well as the Indiana event. In his statement post Trump's plan release, he remained noncommittal and hoped that the measures would support American workers as well as the middle class. Trump openly warned Donnelly in the event of targeting the Democrats in 2018 elections if he did not back the tax plan. The Indiana trip is Trump's third one to tout the tax overhaul in the home state of a Democratic senator who faces re-election following Missouri and North Dakota. Trump indicated of visiting over dozen more states in coming weeks to sell his plan.