Senators in Spotlight as Tax Reform Talks Heat Up

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Senators in Spotlight as Tax Reform Talks Heat Up

Trump intends to sell the proposal tomorrow as a populist "tax cut".

To pass tax reform, the president will need all but two Republicans in the Senate to jump on board or he will need the support of moderate Democrats. Republican lawmakers reportedly plan to craft a budget that assumes up to $1.5 trillion in additional red ink over a decade.

Under the current system, companies based in the US are taxed on profits they earn anywhere in the world.

Even that may not be enough to accommodate what proponents have described as "historic" tax cuts, likely totaling trillions of dollars. The proposal calls for reducing the corporate tax rate to 20 percent from 35 percent, a shift that is meant to make American companies more competitive with their counterparts around the world. Trump's plan would lower the top rate to 25 percent.

Norquist, however, predicted the provision, if enacted, would simply be extended indefinitely by Congress down the road - much as it has continued other corporate tax provisions such as the existing credit for research and development costs.

In addition to doubling the standard deduction, the president promised simplified return filing, a lower corporate tax rate that would encourage job growth and a policy change that would return up to $3 trillion in corporate profits to the United States.

For individuals, there is much less clarity.

Similarly, Trump's rhetoric is at odds with the math regarding his proposed reduction of seven individual tax brackets to three tax brackets of 10, 25 and 35 percent. Furthermore, leaders in Congress are determined to push past any differences they have and deliver on years of promises. And congressional experts say most of the savings from a lower corporate rate would flow to investors, not ordinary workers. The plan would keep the popular mortgage-interest and charitable-giving deductions but calls for ending many others, but legislative committees will sort out the details. Bloomberg reports that a middle-income family with three kids would have to add $20,250 to their taxable income with the personal exemption gone, almost doubling the new "benefit" they'd get from a standard deduction increase. Only 10 percent said tax reform is "not too important" and a lesser 4 percent said tax reform "should not be done". But they have also expressed a willingness to end a popular deduction for state and local taxes that is claimed by many middle-income filers in high-tax states.

But crucial details, such as the income levels for the individual tax brackets, still haven't been hammered out and are being left to Congress.

"So, I think that the goal is to set up whatever these principles are in the six-party discussions and kind of lock everyone down to the basic fundamental infrastructure of what they want to see", a GOP aide told The Daily Caller News Foundation, adding they wanted to make sure to lock down key areas in the outline so they aren't later undercut later.

The Utah Republican released a statement Monday saying: "As we continue to work toward the release of a unified framework that will serve as a base for the tax-writing committees in both chambers to draft legislation, what we are trying to achieve for the American people remains the same".

Brady's counterpart in the Senate - Orrin Hatch, chairman of the Senate Finance Committee - has raised questions about just how unified a tax framework will be.

"The jobs will start pouring in from all over the world coming back to our country", Trump said.

"We can live with it", Rep. Dave Brat, R-Va., a member of the conservative House Freedom Caucus said of an estimated hit to the deficit. The business tax rates are the same although the top individual rate in the earlier House Republican plan would drop to 33 percent instead of 35 percent.

Many find out that they face rates as high as 40 percent, which makes running a profitable business much more hard.

Trump and congressional Republicans campaigned on a tax overhaul, and Trump has lately turned up the pressure on lawmakers to move.

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