WASHINGTON (AP) — President Donald Trump is looking to promote his tax plan as a boon for truckers as his cross-country tour takes him to Pennsylvania for his latest stop.
The White House expected that about 1,000 people, including many truckers, would attend Trump’s speech late Wednesday afternoon speech in Harrisburg against a backdrop of big rigs at an airplane hangar.
Trump’s plan envisions cutting corporate tax rates from 35 percent to 20 percent, reducing the number of personal income tax brackets and boosting the standard deduction.
The expected pitch in the state capital: The proposed changes would benefit truckers by lowering their tax rates, aiding manufacturing, and making it easier for families to pass their trucking businesses onto their children.
“When your trucks are moving, America is growing. That is why my administration is taking historic steps to remove the barriers that slow you down,” according to speech excerpts provided by the White House. “America first means putting American truckers first.”
Trump has left it up to Congress to fill in many specifics of his plan, which leaves out details such as which income levels his new tax brackets would apply to.
Republicans in Congress aren’t solidly behind him, with those from high-tax states controlled by Democrats balking because the framework calls for eliminating the federal deduction for state and local taxes. That deduction is claimed by an estimated 44 million people and costs the government an estimated $1.3 trillion in lost revenue over 10 years.
This dissension threatens a Trump priority and a political imperative for Republicans to show a legislative accomplishment before next year’s elections.
The fractious Republican lawmakers, especially from New York, New Jersey and California, fear the potential financial hit to their constituents. They contend repealing the deduction would subject people to being taxed twice.
“They need our votes” on the tax plan, said Rep. Chris Collins, R-N.J., a member of the group.
Discussions with House leaders on a possible compromise took place last week but are on hold now, Collins and other lawmakers in the group said Wednesday. They said they were confident of a compromise.
Before the tax plan can be formally turned into legislation, Congress must first produce a final plan for the budget. That step by House and Senate budget writers is expected in the coming weeks.
To make their case, GOP leaders distributed a tentative taxpayers’ postcard to rank and file. The “simple, fair ‘postcard’ tax filing” had 14 steps, including listing income, subtracting child tax credit and mortgage interest benefit before arriving at taxes owed or a refund.
Trump’s proposal includes cutting the top income tax rate, getting rid of the alternative minimum tax and eliminating the federal estate tax. He wants to encourage multinational companies to bring back cash that they’ve kept overseas. All told, there’s more than $1 trillion in cash held abroad by S&P 500 companies, according to Deutsche Bank.
“We will eliminate the penalty on returning future earnings back to the United States and we will impose a one-time low tax on money currently parked overseas so it can be brought back home to America, where it belongs,” according to the speech excerpts. He said his Council of Economic Advisers “estimates that this change alone would likely give the typical American household a $4,000 pay raise.”
The $4,000 in additional income estimate comes from a back-of-the-envelope calculation by White House economics adviser Kevin Hassett based on companies returning 71 percent of their foreign profits over the course of eight years.
This estimate appears to assume that the returned profits would flow to workers in the form of higher wages. But many economists say much of it would likely be returned to investors in the form of stock dividends and buybacks.