WASHINGTON — President Donald Trump plans to propose massive tax cuts for businesses big and small as part of an overhaul that he says will provide the biggest tax cuts in U.S. history.
In addition to big tax cuts for corporations, Trump also wants to cut taxes for small business owners from a top tax rate of 39.6 percent to a top rate of 15 percent, said an official with knowledge of the plan.
The top tax rate for individuals would be cut from 39.6 percent to the “mid-30s,” the official said.
The official, who spoke on condition of anonymity, was not authorized to discuss the plan publicly ahead of Trump’s announcement, scheduled for Wednesday.
White House officials had already revealed that Trump’s plan would reduce the top corporate income tax rate from 35 percent to 15 percent. The plan will also include child-care benefits, a cause promoted by Trump’s daughter Ivanka.
Republicans who slammed the growing national debt under Democrat Barack Obama said Tuesday they are open to Trump’s tax plan, even though it could add trillions of dollars to the deficit over the next decade.
Echoing the White House, Republicans on Capitol Hill argued that tax cuts would spur economic growth, reducing or even eliminating any drop in tax revenue.
“I’m not convinced that cutting taxes is necessarily going to blow a hole in the deficit,” said Sen. Orrin Hatch, R-Utah, chairman of the Finance Committee.
“I actually believe it could stimulate the economy and get the economy moving,” Hatch added. “Now, whether 15 percent is the right figure or not, that’s a matter to be determined.”
The argument that tax cuts pay for themselves has been debunked by economists from across the political spectrum. On Tuesday, the official scorekeeper for Congress dealt the argument — and Trump’s plan — another blow.
The nonpartisan Joint Committee on Taxation said Tuesday that a big cut in corporate taxes — even if it is temporary — would add to long-term budget deficits. This is a problem for Republicans because it means they would need Democratic support in the Senate to pass a tax overhaul that significantly cuts corporate taxes.
Trump dispatched his top lieutenants to Capitol Hill Tuesday to discuss his plan with Republican leaders. They met for about half an hour. No Democrat was invited. Afterward, Hatch called it, “a preliminary meeting.”
“They went into some suggestions that are mere suggestions, and we’ll go from there.”
Republicans have been working under a budget maneuver that would allow them to pass a tax bill without Democratic support in the Senate — but only if it didn’t add to long-term deficits.
Democrats said they smell hypocrisy over the growing national debt, which stands at nearly $20 trillion. For decades, Republican lawmakers railed against saddling future generations with trillions in debt.