Daily Deduction Abandoning Ship for a Fluid Framework
Renu Zaretsky
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The GOP gives up on ACA repeal. Senate Republicans, without 50 votes to pass the Graham-Cassidy health care bill on a fast track, withdrew the legislation from consideration. On to a tax bill. 

Cuts, cuts, and more cuts! The White House and congressional GOP leaders will release a tax framework today. It will far short of a plan and leave many important details unspecified. President Trump heads to Indiana today to tout the tax framework that reportedly would lower the corporate tax rate to 20 percent, the rate on pass-through businesses to 25 percent and reduce the number of individual income tax brackets from seven to three—or perhaps four (with a top rate between 35 percent and 39.6 percent). It would double the standard deduction but eliminate personal exemptions. The President told conservatives over dinner Monday night that he wants the “biggest tax cut in American history.”

As for the corporate rate: 25 percent is better than 15 percent, but… MIT’s Robert Pozen, chair of TPC’s Leadership Council, runs some numbers on President’s Trump’s previously stated goal of a 15 percent corporate tax rate. “Even with wildly optimistic assumptions on closing existing tax preferences, a 15 percent rate for corporate income taxes is not consistent with the recent budget resolution.” Pozen thinks a 25 percent rate may be the best bet.

Will Americans be surprised—or pleased—by the tax plan? A new Washington Post/ABC News poll shows that more than 70 percent of adults say the nation's tax system already  favors the wealthy more than the middle class, while 55 percent feel this “strongly.” About half think Trump's tax plan will disproportionately benefit wealthy Americans.

Tune in tomorrow afternoon to make sense of fiscal chaos. The Tax Policy Center’s Donald Marron and Eugene Steuerle will join Ben Harris and Jan Eberly from Northwestern University to discuss the fiscal uncertainty the nation faces this fall. The hour-long webcast begins at 12:15 CDT. 

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