Politics

Trump: Tax Overhaul Would Make U.S. a ‘Jobs Magnet’

Will get chance to make case to a Democratic senator on Wednesday

President Donald Trump during a joint news conference with Romanian President Klaus Iohannis in the Rose Garden on June 9. He met with GOP tax-writers Tuesday at the White House. (Chip Somodevilla/Getty Images)

Updated 6:22 p.m. | Lowering tax rates on private-sector firms would make the United States a “jobs magnet” and provide a boost to the economy, President Donald Trump said Tuesday during a meeting with Republican tax-writers.

“But if we’re going to keep this momentum going and allow this economy to truly take off as it should, it is vital that we reduce the crushing tax burden on our companies and our workers,” Trump said after ticking off a list of positive economic developments since he took office.

“We must restore our competitive edge,” Trump said. “We can’t be the jobs magnet of the world if we continue to tax our industries as rates 60 percent higher than companies [are taxed] in other countries. Can’t do it.”

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The meeting gave the president an opportunity to shift to one of his main campaign issues and away from the narrative of his controversial decision to end the so-called DACA immigration program that had shielded around 800,000 undocumented individuals living in the U.S.

The group known as the “Big Six” is composed of Washington heavy-hitters: Speaker Paul D. Ryan, House Ways and Means Chairman Kevin Brady, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, Senate Finance Chairman Orrin G. Hatch, and National Economic Council Director Gary Cohn.

The group features no Democrats, but Trump and top aides say they want any eventual tax measure to receive some Democratic support.

On Wednesday he will get a chance to make the case directly to one of the Senate Democrats who may be most willing to work with the GOP leadership.

“I’m going to get on the plane and fly out to North Dakota with President Trump tomorrow,” Sen. Heidi Heitkamp confirmed herself Tuesday evening.

“We’ve always said that we’re interested in tax reform,” Heitkamp told reporters at the Capitol. “I’ve had some conversations, as I’ve told you in the past, with Gary Cohn and with a number of the people in the administration, continued to be curious about what the actual plan is.”

One of her initial concerns with what has been reported is the idea of taxing contributions to employer-sponsored retirement plans on the front end, a shift that would generate revenue within the normal budget window.

“I have not been a fan of taxing our 401(k)s, and so that story ... for me presents some real problems because I think we already have a retirement security program in this country, and it will discourage more investment in retirement,” Heitkamp said.

Heitkamp signaled she was interested in what the president would say during the trip both in private and in public.

“The goal for me is — North Dakota is a state of small businesses, and so — and many of those businesses operate in pass-through entities, so C-corp reform is not particularly a big issue in North Dakota,” Heitkamp said. “We’re interested in rate reform as well, but the bottom line is: is it going to be good for North Dakota? Is it going to be good for North Dakota farmers who are struggling, who now have huge operating loans so the interest deduction is important.”

The effort will be an uphill fight even if it becomes a Republican-only push. That’s because divisions exist among GOP members and the president about where to set individual and corporate rates; if and how any rate cuts would be paid for; and whether the plan could be permanent or would require an expiration date. Then there are differences about how it might affect the deficit.

“We must make the tax code as simple as possible,” Trump said during the session. The code is “extremely complex, it’s not fair, and it’s extremely hard to understand.

“This is more than just tax reform. This is tax cutting,” he said of the plan Republican lawmakers and his team are working on. “We’re going to cut taxes … for people, for individuals, for middle-income families. We are going to reduce taxes for for companies — and those companies are going to produce jobs.”

Trump reinforces his populist talking points when discussing a handful of issues that would be buoyed by his tax plan — vague as it may be. On that list: increased wages, new jobs, bringing back manufacturing jobs, reviving the middle class, among others.

It also gives him an opportunity to publicly criticize a wildly unpopular Congress — though his own party controls both chambers. During the opening speech of his tax push last week in Missouri, the president tried to put the onus on Congress.

“And I don’t want to be disappointed by Congress. Do you understand me?” he said, pointing to several GOP members seated near the stage. “I think Congress is going to make a comeback, I hope so. I tell you what: the United States is counting on it.”

His top spokeswoman, Sarah Huckabee Sanders, also jabbed lawmakers Tuesday.

“They just came back from a three-week vacation,” she said of lawmakers. “I think that they should be rested and ready to take on some big challenges that America faces.”

Speaker Ryan last week described Trump and congressional Republicans as “united in our determination to get this done.” In a statement, Ryan called a tax bill the House Republicans’ “top priority.”

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Trump told the Missouri audience he wants a tax bill that will “bring back Main Street” in large part by reducing what he calls the “crushing tax burden” anchoring both businesses and workers.

 

“Our self-destructive tax code costs Americans millions and millions of jobs,” Trump said, “trillions of dollars, and billions of hours spent on compliance and paperwork.”

 

Trump has offered few specifics so far, but he used the speech last Wednesday to unveil what he called his four “basic principles” for a tax overhaul bill.

 

On the list are: a simpler tax code that is easier for average Americans to understand; tax code changes that lower the corporate rate from 35 percent to 15 percent, and thereby spawns new jobs and bigger salaries; changes tailored for middle-class families; and incentivizing companies to bring corporate profits they took abroad back home.

 

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