President Donald Trump warned Congress not to fumble the chance to rewrite the U.S. tax code and reinvigorate the economy as he kicked off his effort to sell the American public on a tax plan.
“So this is our once-in-a generation opportunity to deliver real tax reform for everyday hard-working Americans,” Trump said during a speech Wednesday at a manufacturing plant in Springfield, Missouri. “I am fully committed to working with Congress to get this job done, and I don’t want to be disappointed by Congress—do you understand me?”
In a speech that was light on detail, Trump put the onus on lawmakers to fulfill his call for reducing the tax burden on U.S. companies and workers. The president has yet to sign a signature law of his own, and his attempt to repeal much of Obamacare, his predecessor’s signature accomplishment, ended in July with a spectacular defeat in the Senate.
Trump outlined four principles that he’s referred to before—simplifying the tax code and closing loopholes that benefit wealthy Americans and special interests; slashing the corporate rate to create more jobs and higher wages; providing tax relief for middle-class families; and cutting the tax companies would pay to bring back the trillions of dollars in profit that they currently hold offshore.
He repeated his endorsement for a 15 percent corporate income tax rate, down from the current 35 percent. Though some economists have questioned whether it’s possible to achieve a rate that low, Trump stressed that workers would benefit as a result.
“We must reduce the tax rate on American businesses so they keep jobs in America, create jobs in America and compete for workers right here in America,” Trump said. “When businesses compete for labor, your wages will go up.”
Obstructing Cuts Slashing the rate for corporations and so-called pass-through entities to 15 percent could cost more than $2 trillion over 10 years. If tax changes are to be permanent, then any cuts have to be accompanied by offsets such as the elimination of loopholes. So far, White House officials and congressional leaders haven’t provided many details about ways to offset cuts, aside from eliminating state and local tax deductions.
The White House has said an overhaul of the tax code is essential for creating the kind of economic growth the president has promised his supporters, and the speech in Missouri represents the first step in what allies and opponents alike describe as an exceedingly ambitious legislative effort.
With regard to the corporate rate, Trump told his audience that Senator Claire McCaskill, a Missouri Democrat who faces re-election next year, must support cutting it. Otherwise, “you have to vote her out of office,” he said.
While advocating for bipartisanship and support for “pro-American tax reform,” the president also called out Democrats for “looking to obstruct tax cuts and tax reform, just like they obstructed so many other things including administrative appointments and health care.”
Tuesday Meeting Trump’s Treasury Secretary, Steve Mnuchin, and National Economic Council director, Gary Cohn, have been meeting as part of a group known colloquially as the Big Six in tax talks since the spring, but have yet to propose much in the way of specifics. Other participants are the Republican leaders of the House and Senate, Paul Ryan and Mitch McConnell, respectively, and the Republican chairmen of the congressional tax-writing committees, Senator Orrin Hatch of Utah and Representative Kevin Brady of Texas.
Though Cohn has been leading the administration’s tax efforts, Trump didn’t mention him during Wednesday’s speech—even though he singled out several administration officials who had accompanied him to Missouri.
Trump plans to meet with the Big Six at the White House on Tuesday and with Democratic and Republican congressional leaders on Wednesday, an administration official said.
One senior White House official said there would be ample time to discuss the specific points of the tax plan later, but that it was equally important to rally Americans behind the notion that changes would benefit the middle class. The choice of Springfield, considered the birthplace of Route 66, was intended to underscore that a tax overhaul should benefit the Main Street America that thrived during the iconic highway’s heyday, a second White House official said.
—With assistance from Lynnley Browning
