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Trump considering a 'major tax cut' for middle-income earners
PRESIDENT Donald Trump said he's considering a "major tax cut" for middle-income earners that he may announce just days before crucial mid-term elections that will determine control of Congress.
The president offered no details on the proposal, which would follow a landmark tax overhaul last year that Republicans had hoped would ensure they'd keep control of Congress after the mid-terms.
The 2017 overhaul, which has been criticised for mainly benefiting the wealthy and corporations and for increasing the federal budget deficit, hasn't helped GOP candidates as much as Republicans thought it would. Many forecasters believe Democrats are likely to take the House in November.
"We're looking at a major tax cut for middle income people," the president told reporters on Saturday after a rally in Elko, Nevada - the final leg of a three-state swing through the West to bolster support for Republican House, Senate and gubernatorial candidates. "Not for business at all; for middle-income people."
Treasury Secretary Steven Mnuchin also said the intention is not to have anything broader than a middle-income tax cut. "We want to be careful in balancing the financial issues with making sure we get appropriate tax cuts to the middle income," Mr Mnuchin said on Sunday in an interview in Jerusalem, the first stop of a six-country tour of the Middle East this week.
Mr Trump's tax overhaul has also been faulted for adding significantly to the government's budget deficit. It's possible that a second round of tax cuts could even face resistance from some Republicans concerned about increasing the deficit even more.
No Democrats supported last year's tax bill, and they've been critical of plans for second round of tax cuts since they were first discussed by Republicans. Unless offset by spending reductions, any new tax cut would further add to the deficit, which reached US$779 billion, a six-year high, in Mr Trump's first full year in office.
Mr Trump said Representative Kevin Brady, chairman of the House Ways and Means Committee, and House Speaker Paul Ryan were working on the possible legislation. He added that the plan could be announced as soon as Nov 1. Elections that will decide the control of Congress will be held on Nov 6. Mr Mnuchin said: "We hope to have something soon."
"There is continued interest in building on the success of the Tax Cuts and Jobs Act and constantly improving the tax code for hardworking families and America's small businesses," said Rob Damschen, a spokesman for Mr Brady.
The Republican-led House passed legislation in September that would make permanent the 2017 tax cuts for individuals and pass-through businesses which otherwise would expire at the end of 2025. That measure is unlikely to be taken up in the Senate anytime soon, though, as party leaders are hesitant to push a bill they don't expect could garner the 60 votes needed to pass. BLOOMBERG