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Trump stands behind Big Six tax framework, sources say

  • President Donald Trump supports the framework for tax reform that the so-called Big Six will unveil Wednesday.
  • Having Trump's full backing will be crucial for Republican lawmakers as they get into the details of a full plan.

President Donald Trump supports the framework for tax reform that the so-called Big Six will unveil Wednesday, according to two senior administration officials, cementing Republicans' pivot to tax reform following the demise of the health-care bill.

Trump has been an uncertain partner in advancing the GOP leadership's legislative agenda at times. He called one version of the Republican health care bill "mean;" stunned lawmakers — and his own Cabinet — by cutting a deal with Democrats to raise the nation's debt limit; and expressed sympathy for the undocumented children of illegal immigrants.

But on tax reform, several people who have spoken with Trump say the real estate mogul-turned president is deeply engaged. One person who dined with the president at the White House on Monday said he lit up when the conversation turned from the flailing Graham-Cassidy health-care bill to the path forward for taxes.

"The Republican failure so far on health care makes it more difficult for Republicans in Congress to screw up tax reform," the person recalled Trump saying. "He talked about health care a fair amount, but he was most animated by tax cuts, tax reform."

Having Trump's full backing will be crucial for Republican lawmakers in the coming months as they move beyond the broad brushstrokes of a plan and start negotiating difficult details, such as ways to raise revenue and which popular deductions to eliminate. The White House and House GOP leadership have insisted the new deadline for getting tax reform done is the end of the year.

Senior administration officials said Treasury Secretary Steven Mnuchin and National Economic Director Gary Cohn met with Trump on Monday to discuss the details of the tax framework. Trump has pushed for lower rates for corporations and so-called pass-through businesses, saying as recently as Sunday that he would prefer a 15 percent corporate rate.

The Big Six framework is expected to outline a 20 percent rate instead, according to several people briefed on the plan. The White House had also called for a 15 percent rate for pass-throughs; the plan will likely end up at 25 percent, two people familiar with the contents said.

Trump is slated to deliver a speech on tax reform in Indiana on Wednesday and is expected to argue that reforming the tax code is essential to delivering on the populist message that drove his campaign. The administration is framing tax cuts for businesses as essential for encouraging companies to bring money back from overseas — and ensuring that they stay in America in the first place. They will also argue that big reductions to the business tax code will result in more jobs and higher wages for workers.

"If we do this, we will create millions of new jobs for our people, and bring many, many businesses back to our shores," Trump said Tuesday before a meeting with members of the House tax-writing committee. "We won't see companies leaving our country, firing their people, and going and then selling their product, by the way, back into our country with no tax and no retribution. That will all stop."

The president also previewed a few key details of the tax framework, which he said would include doubling the standard deduction that households are allowed to take, as well as expanding the child tax credit.

According to an Axios report, the plan will raise the bottom tax rate for low-income households from 10 percent to 12 percent, as proposed by House GOP leadership. However, doubling the standard deduction could offset that change — and potentially eliminate the tax burden for some households. The White House is planning to pitch the measure as a "zero tax rate" on low-income families.

Trump will also continue pressuring vulnerable red-state Democrats to get on board with tax reform. Indiana's Democratic senator, Joe Donnelly, will travel with the president for Wednesday's speech. Donnelly was also in Indiana last week for Vice President Mike Pence's address on tax reform.

Donnelly has introduced a bill that he says will penalize companies that outsource jobs. He said he has discussed the effort with both Trump and Pence.

"I believe tax reform should include policies that will benefit working and middle-class families, create new jobs, and protect existing jobs," Donnelly said, in a Tuesday statement. "I'm pleased the president has been supportive of my proposal to address the outsourcing of American jobs, and I am hopeful that any tax reform proposal includes measures that support American workers as well as the middle class and encourage domestic investments."

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