Trump gives hints on tax reform and ACA in address to Congress
President Trump outlined a wide range of priorities, including tax reform and a health care overhaul, in his first speech before a joint session of Congress on Tuesday night.
While many of the concepts were familiar from the campaign trail and his first month in office, the tone of Trump's speech was far more measured than usual as he reached out for support from lawmakers on both sides of the aisle.
During a section of the speech on taxation, Trump spoke of cutting the corporate tax rates, although he left out any details. “Right now, American companies are taxed at one of the highest rates anywhere in the world,” he said. “My economic team is developing historic tax reform that will reduce the tax rate on our companies so they can compete and thrive anywhere and with anyone. It will be a big, big cut.”
Trump went on to describe the broad outline of his plans for individual tax reform, but without going into specifics. “At the same time, we will provide massive tax relief for the middle class,” he said. “We must create a level playing field for American companies and our workers — have to do it.”
Trump also made a fleeting reference to a border adjustment tax for imported goods. “Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes, but when foreign companies ship their products into America, we charge them nothing or almost nothing,” he said.
He then went on to describe his recent meeting with Harley-Davidson officials, who told him about the high levies on their products when they are sold in some countries. “At our meeting, I asked them, 'How are you doing? How is business?' They said that it’s good. I asked them further, 'How are you doing with other countries, mainly international sales?' They told me — without even complaining, because they have been so mistreated for so long that they’ve become used to it — that it’s very hard to do business with other countries, because they tax our goods at such a high rate. They said that in the case of another country, they taxed their motorcycles at 100 percent. They weren’t even asking for a change. But I am. I believe strongly in free trade, but it also has to be fair trade. It’s been a long time since we had fair trade.”
Tax Credits for Health Insurance
Trump also discussed some of his ideas about a replacement for the Affordable Care Act, making it clear that he still planned to repeal Obamacare, although he favored continuing to provide tax credits to enable people to buy health insurance.
“Here are the principles that should guide Congress as we move to create a better health care system for all Americans,” he said. “First, we should ensure that Americans with pre-existing conditions have access to coverage and that we have a stable transition for Americans currently enrolled in the health care exchanges. Secondly, we should help Americans purchase their own coverage, through the use of tax credits and expanded health savings accounts, but it must be the plan they want, not the plan forced on them by our government. Thirdly, we should give our state governors the resources and flexibility they need with Medicaid to make sure no one is left out. Fourth, we should implement legal reforms that protect patients and doctors from unnecessary costs that drive up the price of insurance and work to bring down the artificially high price of drugs and bring them down immediately. And finally, the time has come to give Americans the freedom to purchase health insurance across state lines which will create a truly competitive national marketplace that will bring costs way down and provide far better care.”
Trump called for unity in solving health care and other problems. “Everything that is broken in our country can be fixed,” he insisted. “Every problem can be solved. And every hurting family can find healing and hope. Our citizens deserve this, and so much more, so why not join forces and finally get the job done and get it done right?”
Former Kentucky Governor Steve Beshear delivered the Democratic response to Trump's address. Trump had quoted Gov. Matt Bevin of Kentucky saying that Obamacare was “failing in his state, the state of Kentucky, and it’s unsustainable and collapsing.”
However, Beshear pointed to the success of the ACA in the Bluegrass State. “Does the Affordable Care Act need some repairs? Sure it does. But so far, every Republican idea to replace the Affordable Care Act would reduce the number of Americans covered, despite your promises to the contrary,” he said. “Mr. President, folks here in Kentucky expect you to keep your word, because this isn't a game, it’s life and death for people. These ideas promise access to care, but deny the importance of making care affordable and effective. They would charge families more for fewer benefits and put the insurance companies back in control. Behind these ideas is the belief that folks at the lower end of the economic ladder just don't deserve health care. That it is somehow their fault that their employer doesn't offer insurance or that they can't afford to buy expensive health plans.”
Beshear indicated that Democrats would fight to preserve the gains made in covering the uninsured since the passage of the ACA. “But just who are these 22 million Americans, including 500,000 people right here in Kentucky, who now have health care that didn't have it before?” he asked. “Look, they’re not aliens from some distant planet. They are our friends and neighbors. We sit in the bleachers with them on Friday night, we worship in the pews with them on Sunday morning. They’re farmers, restaurant workers, part-time teachers, nurses aides, construction workers and entrepreneurs working at high-tech startups. And before the Affordable Care Act, they woke up every morning and went to work, just hoping and praying they wouldn't get sick because they knew that they were just one bad diagnosis away from bankruptcy. You know, in 2010, this country made a commitment, that every American deserved health care they could afford and rely on, and we Democrats are going to do everything in our power to keep President Trump and the Republican Congress from reneging on that commitment.”
KPMG weighed in with a statement on Trump's business tax proposals. “President Trump’s promise to make U.S. companies more competitive signals his intent to deliver on comprehensive U.S. tax reform,” said John Gimigliano, head of the federal tax legislative and regulatory group at KPMG LLP.