Trump to tout tax plan at Pennsylvania event with truckers

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Unveiling a new sweeping tax plan, U.S. President Donald Trump says it will benefit middle class workers the most and simplify the tax code. (Sept. 27)
AP

WASHINGTON – At a speech Tuesday in Harrisburg, Pa., President Trump will showcase a faction of American workers he says will benefit from his proposed tax plan: U.S. truckers.

They’ll be standing behind Trump at a rally as he tries to cast his tax plan as a boon to the middle class – even as the nonpartisan Tax Policy Center says those with the very highest incomes would receive the biggest tax cuts. 

“Nothing gets done in America without the hard working men and women of the trucking industry,” Trump will say in his speech, according to an administration official who briefed reporters on condition of anonymity. “When your trucks are moving America is growing … That is why my administration is taking historic steps to remove the barriers that slow you down.”

In his speech, the president will also make a new claim, according to the official: That the typical American household could see a salary raise of $4,000 on average from a provision encouraging major U.S. companies to bring back – or repatriate – profits currently stored overseas.

The official did not provide any details about the calculation behind Trump’s claim.  

Trump often speaks about bringing back trillions of dollars that U.S. companies are believed to keep overseas, and has floated a one-time low tax rate on those corporate profits. In a Forbes interview released this week, Trump said he believes his tax plan will lower the deficit. “This is going to bring $3 trillion dollars back,” he said, noting that “the offshore money” will help achieve this goal. 

In a recent speech, Kevin Hassett, Trump’s Council of Economic Advisers chair, said U.S. worker pay is not keeping pace with corporate profits because much of those profits are parked overseas to avoid higher U.S. tax rates.

“Workers used to get a 1.1 percent raise for a 1 percent increase in corporate profits. Now the pass-through to workers is closer to 0.4 percent. Why did it change so much? Because the profits are offshore, benefiting other nations’ workers,” said Hassett. Offering a onetime low tax rate to bring back those profits would help close that gap, he said.

According to D.J. Nordquist, NEC chief of staff, the White House will soon provide a detailed analysis.  

In Pennsylvania, Trump will appear in an international guard hangar with a crowd of about 1,000 workers organized by the Pennsylvania Manufacturing Association, the Pennsylvania Chamber of Commerce and other business groups.

According to the administration official, truckers would benefit from a lower marginal tax rate. The official also outlined tax benefits for employers, including a lower rate for small businesses and repeal of the estate tax – savings that the administration believes would be passed on to employees. The estate tax is charged only on estates worth about $5.5 million or more.

According to the Tax Policy Center, only roughly 50 small business and small farm estates nationwide will face any estate tax in 2017, owing on average less than 6% of their value in tax. The provision also brings in significant revenue to the federal Treasury. 

The group also estimates that, under the plan “in 2018, all income groups would see their average taxes fall, but some taxpayers in each group would face tax increases.”

The Trump administration is also facing broader questions about how it will fund the tax plan. The nonpartisan Committee for a Responsible Federal Budget estimates the plan calls for roughly $2.2 trillion of net tax cuts.

Trump is seeking to build momentum for a tax plan already under criticism from Democrats who say it will explode the deficit in exchange for repealing the estate tax and maintaining preferential tax rates for some of the wealthiest Americans, including hedge-fund managers. 

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