President Trump has promised a substantial tax cut is on the way for middle-class Americans – and there is now speculation about just how low rates could go.
Trump’s economic advisers are considering whether he should campaign on the promise of a 15 percent tax rate for the middle class, The Washington Post reported on Tuesday, citing multiple people involved in the White House’s internal discussions regarding the “Tax Cuts 2.0” package.
Larry Kudlow, who the Post noted is seen as spearheading the tax cut package, did not commit to the 15 percent rate during an interview with CNBC on Tuesday—but he did say it sounded like “a pretty good idea.”
Kudlow noted it was too soon to lay out specifics, adding that the president would have to sign off on anything, first.
There are currently seven tax brackets, with rates ranging from 10 percent to 37 percent. While some middle-class Americans may already be paying a 12 percent rate, others are paying 22 percent or 24 percent – which means a potential cut to a 15 percent rate would save them a lot of money.
The Post reported that the president is looking to have a simple plan to present to voters before the 2020 election.
Tax cuts have already emerged as a campaign theme. During a recent rally, Trump lashed out for Democrats amid their calls to increase and expand taxes.
“The Democrats have this crazy theory, I mean I don’t know how it works … one of their theories, we’re going to raise your taxes. How does that work?” Trump asked the crowd in Monroe, Louisiana. “They’re saying, ‘we’re going to raise your taxes,’ and I’m saying ‘excuse me, does that work?’”
A senior administration official told FOX Business in September that items being considered for “Tax Cuts 2.0” include making permanent some of the items from the Tax Cuts and Jobs Act that are set to expire in 2025, like lowered personal rates, the doubled standard deduction and the $10,000 cap on state and local tax deductions.
President Trump told House Republicans he was working on a substantial tax cut for middle-income Americans, which he said would be something “everyone’s really looking for.”
“It will be a very, very substantial tax cut for middle-income folks, who work so hard,” he said.
The president said details would be released in the coming year.
The Tax Cuts and Jobs Act was signed into law by Trump in 2017, one of the most significant overhauls of the U.S. tax code in decades.