Trump's tax cuts could die the hard way: A little at a time
Democratic presidential candidates like Joe Biden and Kamala Harris have talked about repealing the GOP’s tax overhaul. Yet a large-scale rollback is unlikely. Instead, two other forces could slowly unravel the law -- Democrats currently in power in the House and President Donald Trump’s trade policies.
House Democrats, in a package of tax legislation scheduled to be debated Thursday, proposed rolling back some of the 2017 changes to the estate tax, making it apply to more people sooner. Democrats have also contemplated using small increases to the corporate rate, which the Republican law cut to 21% from 35%, to pay for their own tax priorities.
Democrats say they would like to use the corporate tax cuts to offset the cost of lowering taxes for the middle class, by expanding the earned income tax credit for low-wage workers, broadening tax credits for families with children, and renewing expired tax breaks for the biodiesel and renewable energy industries. But the legislation they released Tuesday only specified the estate tax changes, and not the corporate rate, as a way to pay for the tax cuts.
The Republican-controlled Senate will reject anything that threatens to diminish their signature legislative achievement, but the House plan is a taste of what could come if the balance of power in Washington shifts after 2020.
Most Democrats are comfortable with a corporate tax rate of at least 28%, with some willing to go much higher.
Democrats almost universally agree the 37% tax rate on top earners should go back to what it was before the 2017 overhaul -- 39.6% -- and there’s appetite for a much higher top rate on the wealthiest Americans. Some progressives have praised New York Representative Alexandria Ocasio-Cortez for her suggestion to raise the top tax rate to 70% for those earning millions.
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