Donald Trump's Tax Plan Would Change Some Things, Here's What To Know
This week has shown that the Trump administrations ideas for how to run the nation's budget are causing a stir. On Wednesday, Sept. 27, President Donald Trump unveiled his tax plan, and people are understandably confused about a lot of it. On Friday, the Senate Budget Committee released their budget proposal, which will allow for adding $1.5 trillion to the national deficit.
Trump's tax plan, a nine-page proposal to overhaul taxes that he says will benefit low- and middle-income families, has been criticized as a reverse Robin Hood scheme that will give tax breaks to corporations and wealthy Americans. The plan released Wednesday represents a general overview by Trump and Congress, showing that they've agreed on certain key areas such as where to make cuts. Now, it's up to the House and Senate to pass their respective proposals and hammer out the fine print.
The Senate's resolution is not the tax reform -- yet. The resolution is more or less a tool designed to prevent a Democratic filibuster using procedural rules that would allow the GOP to get the tax reform legislation through on just 50 votes instead of the normal majority required -- if that sounds familiar, it's because it's the same tactic they used to try and pass their health care legislation.
The Senate resolution is expected to be presented before the full Senate in mid-October following a committee markup next week, The Hill reports. The Senate's proposed cuts to mandatory spending -- audience favorites like welfare and social services -- are vastly different from what the House version proposed. The former calls for $1 billion, coming from Energy and Natural Resources, while the latter calls for $203 billion cut, from welfare, poverty prevention and agriculture programs. Clearly, there will be some big differences to rectify before anything is final.
Per the New York Times, Senator Chuck Schumer (D-NY) railed the proposal on these grounds, saying,
This budget would green-light a tax scheme that could very well put Social Security, Medicare, and Medicaid on the chopping block.
Senator Bernie Sanders (D-VT), unsurprisingly came out staunchly against the GOP's budget proposal as well.
The proposal, by cutting $1 billion from Energy and Natural Resources, potentially opens the door for Alaska to drill for oil.
Meanwhile, the House, whose Budget Committee approved their own resolution in July, is expected to vote on it next week, the Times reports.
Confusing though it is, a couple points stand out about all this tax talk: the plan brought by Trump and his Republican leaders, though it has been billed otherwise, actually increases the deficit, adding to the $10 trillion the nation is already indebted, according to Bloomberg, which surveyed a group of economists about the proposal. The vast majority of them expect the plan to increase the debt despite its budget cuts. The Committee for a Responsible Federal Budget says the GOP's plan will add another roughly $2 trillion to the tab.
In addition, there is somewhat of a consensus -- at least among news outlets -- that the tax plan will mean cuts for the wealthy, as the Washington Post reports, and corporate tax breaks, per Business Insider. As for how the rest of us will fare, that's a bit fuzzier, especially as it's unclear now how Congress will dish out the rest of the cuts. Yet Business Insider reports the proposal eliminates many itemized deductions for individuals, so while it might help some, it will hurt other Americans.
Beyond Democratic leaders, others were outspoken on social media about the Republican tax plan and what it means for the U.S. economy and citizens. The fiscal year begins on Sunday, but Trump negotiated to allow for a Dec. 8 deadline for the current budget, according to The Hill. If nothing has been decided by then, the government will experience a shutdown.