President Trump has initiated a new approach leading up to the mid-term elections and has announced a new tax cut plan that he expected to provide a middle-income tax reduction of about 10%. The announcement came as a surprise to both sides of the aisle in Congress.
Announcing the New Tax Cut
Mr. Trump first announced the new tax cut plan at a rally in Nevada, and said that he expects to have introduced by November. Congress is not scheduled to be back in session until the week of November 12, and the President has said that he will not use an Executive Order to bypass Congress on this matter. Trump told reporters at the White House that a vote on the new tax cut plan would occur after the midterm election on November 6.
The new tax cut will focus exclusively on middle-income taxpayers and will “not be for business at all,” Trump repeatedly noted.
The announcement was not followed up with any details of the potential tax bill and both Congressional leaders, and White House officials who have spoken to numerous news outlets in the last few days have all said that they are unaware of any proposed tax legislation expected before the midterm elections.
The potential for success of any new Republican tax cut bill is largely uncertain as Democrats gear up to try and take control of the House and Senate in November. Given voter animosity towards Congress and the President, it is uncertain as to whether Republicans will hold the majority in either Chamber of Congress after the midterms.
No Democratic lawmakers voted for last year’s tax reform enacted under the Tax Cut and Jobs Act (TCJA). At this time, it appears unlikely that any new measure attempting to build upon the TCJA’s tax cuts would garner sufficient Democratic support to attain passage.
Grossman Yanak & Ford LLP will continue to monitor developments regarding the President’s proposal and report information to our clients and friends as we learn more. In the interim, should you have questions or comments, please contact Bob Grossman or Don Johnston.