The GOP Is Already Laying The Groundwork To Cave On Tax Reform

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Jack Crowe Political Reporter
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A summary of the Republican tax reform framework, released Wednesday by the White House, explicitly addresses the possibility of an increased individual tax rate for the highest earners, above the 35 percent that GOP leadership has promoted in recent weeks.

A white paper summarizing the proposed legislation touts tax code simplification via the collapse of the existing seven tax brackets down to three individual income brackets, taxed at 12, 25 and 35 percent respectively. However, the summary includes a caveat that expresses Republicans’ willingness to add an additional fourth bracket, that would tax the highest earners at a rate above 35 percent and, potentially, above the existing top individual rate of 39.6 percent.

“An additional top rate may apply to the highest-income taxpayers to ensure that the reformed tax code is at least as progressive as the existing tax code and does not shift the tax burden from high-income to lower- and middle-income taxpayers,” the white paper reads.

GOP leadership and the White House have touted the elimination of excessive income bracketing over the summer as a key component of tax code simplification, which has been advanced as a primary goal of the reform effort.

Conservative groups have stressed tax code simplicity and lower rates for all brackets as central to the reform effort.

Heritage Foundation policy analyst Adam Michel disparaged the potential tax increase on the highest earners as counterproductive in a statement provided to the Daily Caller News Foundation.

“The top ten percent of American wage earners currently pay 70 percent of income taxes. Not reducing this burden would be misguided,” Michel said. “All Americans deserve a tax cut. Tax reform should focus on growth and simplification, rather than focusing on playing games with distribution tables. Tax reform paired with a true tax cut should mean everyone pays less in taxes.”

The increased individual top rate may have been included in a bid to close the yawning budgetary gap produced by ambitious rate cuts and a lack of revenue bolstering countermeasures. The increased rate for the highest individual earners will also likely help endear the White House to the new framework, as it lends credibility to Trump’s insistence that the bill will not amount to a tax break for the wealthy.

Sen. Majority Leader Mitch McConnell’s office did not comment on the motivation behind the conciliatory language, and instead directed TheDCNF to the joint statement issued by the “big six” tax negotiators.

Sen. Finance Committee Chairman Orrin Hatch’s office did not respond to a request for comment in time for publication.

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