White House pitches corporate tax cut as win for workers
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[October 16, 2017]
By Mike Stone
WASHINGTON (Reuters) - The Trump
administration said in an analysis released on Monday that middle-class
Americans would see incomes eventually rise more than $4,000 if
President Donald Trump's corporate tax cuts were enacted, seeking to
counter Democratic criticisms that its tax proposals overwhelmingly
benefit the rich.
The White House and top Republicans in Congress have released a
framework for tax reform that lacks details but is intended to serve as
a guidepost for congressional committees that are crafting tax
Trump has said he would like to see the U.S. corporate income tax rate
reduced to 20 percent from the current 35 percent rate.
An analysis by the White House Council of Economic Advisers said lower
corporate taxes would incentivize companies to invest in new machines
that would require more skilled workers. Companies would then pay higher
wages to these skilled workers.
Kevin Hassett, chairman of the CEA, told reporters in a conference call
that those benefits would take five years to fully "phase in."
Hassett also said lower corporate rates would give companies incentives
to build plants in the United States, rather than overseas.
According to the analysis, middle-class earners would see incomes rise
$4,000. Under Hassett's explanation of the timing, the full increase
would be realized in five years.
Fiscal policy analysts the Tax Policy Center, a nonpartisan research
organization, said the overall benefits of lower corporate taxes tilt
heavily toward those with higher incomes.
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U.S. President Donald Trump speaks about the Iran nuclear deal in
the Diplomatic Room of the White House in Washington, U.S., October
13, 2017. REUTERS/Kevin Lamarque
The Tax Policy Center said middle-income taxpayers would receive less than 10
percent of the benefit of a corporate rate cut while the top 20 percent would
receive about 70 percent. The top 1 percent would see about one-third of the
benefits and the top 0.1 percent would get about one-fifth, the TPC has said.
Democratic lawmakers have lambasted the Trump tax plan's intended tax relief for
corporations and small businesses as a giveaway for the wealthy.
Delivering the Democrats' weekly policy address on Saturday, Senator Bernie
Sanders, a former 2016 presidential candidate, said Trump's budget and tax
proposals were "the most destructive and unfair" in U.S. modern history.
"Donald Trump and Republicans in Congress claim that their tax plan would
benefit the middle class. Nothing could be further from the truth," Sanders
(Reporting by Mike Stone in Washington, DC; Editing by Cynthia Osterman)
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