As President Donald Trump promotes a tax plan that critics say mainly would help corporations and the rich, about three-quarters of Americans say they believe the wealthiest people should pay more in taxes, Reuters/Ipsos polling shows.
Trump was traveling to Harrisburg, Pennsylvania, late on Wednesday to make a speech where he will tell a group of workers, including many truckers, how he believes they will benefit from his tax plan, released two weeks ago.
Earlier on Wednesday, the president of the San Francisco Federal Reserve Bank, John Williams, said he was a “little bit discouraged” about the prospects for federal tax reform.
Given the difficulties Congress has had in passing laws this year, Williams, in comments following a speech about interest rates in Salt Lake City, said he is “losing confidence” that any tax reform will be passed in the next six months or so.
Financial markets have rallied strongly since Trump’s stunning November 2016 election victory, driven partly by expectations that he would cut taxes for businesses.
A Reuters/Ipsos poll conducted from Sept. 29 to Oct. 5 found that 53 percent of adults “strongly agree” that the wealthiest Americans should pay higher tax rates.
Another 23 percent “somewhat agree” that the wealthiest should pay higher tax rates, according to the poll of 1,504 people, which had a credibility interval, a measure of accuracy, of plus or minus 6 percentage points.
In Harrisburg, Trump was expected to describe how, if his tax plan becomes law, truckers would benefit from lower middle class tax rates, lower taxes for manufacturers whose products they transport, a new tax rate for “pass-through” companies, and the end of a tax paid by the wealthiest 0.2 percent of inherited estates, a senior administration official said.
Democrats dispute “Pay Rise”
Trump has called his tax plan a “miracle for the middle class” that will spur economic growth and help businesses. He was expected to tell the truckers his plan “would likely give the typical U.S. household a $4,000 pay raise,” according to an excerpt from his prepared remarks.
White House economic adviser Kevin Hassett has said that if U.S. companies were allowed to bring foreign profits into the country, the median U.S. household would see their real income rise by $4,000 over the next eight years.
“I have not seen any evidence that even comes remotely close to that,” Richard Neal, the top Democrat on the House of Representatives Ways and Means Committee, said of the calculation at a forum on Wednesday in Washington.
Congressional tax writers in the House and Senate are working to fill in the details of the plan so Republican leaders can aim to pass it by January, delivering what would be Trump’s first legislative victory a year into his presidency.
Taxpayers in the highest 1 percent of incomes, making more than $730,000 annually, for example, would get about half of the total benefit from Trump’s plan, with their after-tax income rising an average of 8.5 percent, according to the Tax Policy Center, a Washington-based nonprofit tax think tank.
The plan calls for cutting the corporate tax rate to 20 percent from 35 percent and creating a new category for pass-through income earned by partners and sole proprietors, which would be taxed at 25 percent, instead of the 39.6 percent top individual rate currently paid by some.
It proposes cutting the top individual rate to 35 percent, but congressional tax writers may opt to create an additional, higher rate for the highest earners.
Trump’s plan also proposes eliminating the 40 percent tax on inherited estate assets worth more than $5.5 million, or $11 million for a married couple.
A highly placed Republican operative who used to work with senior leadership on Capitol Hill said he did not expect the estate tax repeal to be included in a final tax package.
That is because the proposal would greatly benefit Trump himself and his family, which would leave the tax reform effort and Trump open to Democratic attack, the operative said.
He said many Republicans do not see estate tax repeal as crucial, but Republicans have promised wealthy supporters for years that the tax, which they call the “death tax,” will end.
New Reuters/Ipsos polling shows Three-Quarters of Americans Favor Higher Taxes for Wealthy People. Trump’s blueprint would provide uneven tax relief.