President Donald Trump and Congressional Republicans seem to be on the same page about tax reform. Unfortunately for middle-class Americans, that means they both support a plan that is widely expected to benefit the wealthy at the expense of the rest of the country.
The options include capping the mortgage interest deduction for homeowners; scrapping people's ability to deduct state and local taxes; and eliminating businesses' ability to deduct interest, while also phasing in so-called full expensing for small businesses that allows them to immediately deduct investments like new equipment or facilities.
Politico also reported that some Republicans want to implement an upfront tax on 401(k) savings, which could raise billions of dollars. At the same time, many fiscal conservatives dislike this idea as a gimmick that would do little to remedy long-term budgetary issues, and it is being met with predictable resistance from the financial services industry and nonprofits.
Trump is expected to begin campaigning for the Republican tax reform plan as early as next week, according to a report by Bloomberg. He is not expected to offer any specifics himself in those speeches, but instead tout the benefits his tax reform agenda is expected to bring to the middle class and business community. Instead the burden of shaping actual tax reform policy will rest with the congressional committees assigned to writing them up.
Wall Street seems to be rallying behind the tax reform plan in anticipation of the large cuts it will yield them, according to a report by Bloomberg. This is in spite of the fact that they criticized both Presidents Bill Clinton and Barack Obama for raising the deficit, even though Trump's tax plan is expected to reduce federal revenue by $3.9 trillion over the next decade.