Donald Trump with his wife Melania and sons Barron and Donald Jr. being sworn in by Chief Justice John Roberts, with House Speaker Paul Ryan behind them
Photo: Andrew Harrer/Bloomberg
Newly inaugurated President Donald Trump has released a “
Contract with the American Voter,” outlining his 100-day plan to “make America Great Again,” including plans for a Middle Class Tax Relief and Simplification Act.
The details are sparse, but according to the description, the bill would entail “an economic plan designed to grow the economy 4% per year and create at least 25 million new jobs through massive tax reduction and simplification, in combination with trade reform, regulatory relief and lifting the restrictions on American energy. The largest tax reductions are for the middle class. A middle-class family with two children will get a 35% tax cut. The current number of brackets will be reduced from seven to three, and tax forms will likewise be greatly simplified. The business rate will be lowered from 35% to 15%, and the trillions of dollars of American corporate money overseas can now be brought back at a 10% rate.”
Another piece of legislation, the “End the Offshoring Act,” could also entail tax reform. It would establish “tariffs to discourage companies from laying off their workers in order to relocate in other countries and ship their products back to the U.S. tax-free.”
While Trump’s tax plan differs in significant respects from the one advanced by House Republicans, including House Speaker Paul Ryan, R-Wis., and Ways and Means Committee chairman Kevin Brady, R-Texas, Trump has recently been in discussions with Brady and Republicans in Congress on a “border adjustment tax” that would discourage companies from moving jobs, research or corporate headquarters abroad.
“From this moment on, it’s going to be America First,” Trump said during his inauguration speech Friday. “Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs. Protection will lead to great prosperity and strength.”
Trump and congressional Republicans have also pledged to repeal the Affordable Care Act within the first 100 days. The details on any replacement for the health care legislation are still being worked out, but according to Trump’s plan, it would replace Obamacare with health savings accounts and the ability to purchase health insurance across state lines, and it would give states more authority to manage Medicaid funds. The replacement for the various tax subsidies and tax levies in the ACA are not detailed in Trump’s plan, but he has promised to release legislation after his nominee for Health and Human Services Secretary, Rep. Tom Price of Georgia, is confirmed by the Senate. House Republicans unveiled a framework for their own replacement health care reform plan last year, but those proposals are expected to change once the Trump administration releases its plan.
Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.