TO ELIMINATE POPULAR TAX BREAKS WITH THE PRESIDENT LEAVING THE
HARD CHOICES TO CONGRESS. IN THE LAST HOUR WE GET A LOOK
INSIDE THE HOUSE REPUBLICAN TAX RETREAT WHICH IS UNDER WAY AT
FT. McNAIR ARMY BASE IN WASHINGTON.
THE GOAL IS TO GET IT ALL DONE BY THE END OF THE YEAR AS THE
PRESIDENT SEEKS HIS FIRST BIG LEGISLATIVE WIN.
>> I LOOK FORWARD WORKING WITH THE MEMBERS OF CONGRESS HERE
TODAY TO PASS THE REFORM AND THE MASSIVE TAX CUTS THAT OUR
COUNTRY DESPERATELY NEEDS TO THRIVE, TO GROW, TO PROSPER.
IF WE DO THIS, WE WILL CREATE MILLIONS OF NEW JOBS FOR OUR
PEOPLE AND BRING MANY, MANY BUSINESSES BACK TO OUR SHORES.
>> SO THAT'S REALLY THE GOAL. TO CREATE PROSPERITY.
NEW DETAILS WERE RELEASED BY THE WHITE HOUSE.
OFFICIALS ARE STRESSING THAT THE PRESIDENT WANTS CONGRESS TO WORK
OUT THE SPECIFICS BUT THE PRESIDENT IS GOING TO PROPOSE
CUTTING THE CURRENT TAX BRACKETS FROM SEVEN TO THREE.
12% THEN 25% AND 35%. THEY'RE LEAVING SPACE FOR AN
OPTIONAL TOP TAX BRACKET BECAUSE THEY MAY NEED TO DO THAT IN
NEGOTIATIONS. LET ME JUST TELL YOU RIGHT NOW
THIS IS A LITTLE SMOKE AND MIRRORS.
IT'S KIND OF NEAT TO GO FROM SEVEN TO THREE BUT IT DOESN'T
HAVE ANY MEANINGFUL EFFECT ON PROSPERITY.
FOCUS ON THE CURRENT HIGH TAX RATE.
IT'S 39.6%. THE 12% THE WHITE HOUSE SAYS
PART OF THE PROBLEM IS THEY'RE DOING SOMETHING ELSE TO RAISE
THE MINIMUM LEVEL AT WHICH YOU HAVE TO PAY TAX.
FEWER PEOPLE WILL ACTUALLY PAY TAX AT THAT RATE.
NOW, LET ME TELL YOU WHAT ELSE THEY WANT TO DO.
THEY WANT TO NEARLY DOUBLE THE STANDARD DEDUCTION.
$12,000 FOR INDIVIDUALS. $24,000 FOR MARRIED COUPLES.
THAT'S THE JUSTIFICATION FOR RAISING THE LOWEST TAX RATE FROM
10% TO 12% THAT A WHOLE LOT OF PEOPLE AREN'T ACTUALLY GOING TO
PAY FOR. THE PLAN ALSO CALLS FOR THE
ELIMINATION OF THE SO-CALLED MARRIAGE PENALTY.
RAISING THE TAX CREDIT FOR A CHILD UNDER 17 BY A YET TO BE
SPECIFIED AMOUNT. AND LOOK FOR A NEW $500 TAX
CREDIT FOR NON-CHILD DEPENDENTS. THAT REPLACES THE IDEA THAT YOU
CAN ACTUALLY OTHERWISE CLAIM
NON-CHILD DEPENDENTS. IN ADDITION, THE PLAN CALLS FOR
REPEALING THE ESTATE TAX. WHAT A LOT OF REPUBLICANS CALL
THE DEATH TAX. THIS BENEFITS GENERALLY SPEAKING
THE WEALTHY. IT ALSO REPEALS THE ALTERNATIVE
MINIMUM TAX. AT LOT OF YOU MIGHT SAY I PAY
THE ALTERNATIVE MINIMUM TAX. HERE'S THE PROBLEM.
IT WAS ACTUALLY MEANT TO BE SOMETHING FOR THE WEALTHY.
WASN'T INDEXED TO INFLATION SO A NUMBER OF PEOPLE IN THE MIDDLE
CLASS HAVE BEEN CAUGHT PAYING IT.
MAKE NO MISTAKE. REPEALING THE ALTERNATIVE
MINIMUM TAX OPPOSED TO INDEXING IT TO INFLATION IS A BOOM FOR
THE WEALTHY GENERALLY SPEAKING. THERE ARE EXCEPTIONS TO THIS.
AND I BET YOU YOU'RE GOING TO TWEET ME ABOUT THEM ANY SECOND
NOW. ON THE BUSINESS SIDE, THE PLAN
CALLS FOR SLASHING THE CORPORATE RATE TO 20% FROM 35%.
DONALD TRUMP HAD TALKED ABOUT 15%.
HARD TO GET THERE. THEY'VE BEEN TRYING TO DO THAT.
BUT HERE'S THE INTERESTING PART. IT ALSO CALLS FOR A SO-CALLED
PASS THROUGH RATE OF 25%. THOSE OF YOU WITH SMALL
BUSINESSES, YOU'LL KNOW WHAT THIS IS.
YOU CAN DEDUCT EXPENSES AND PAY THE REMAINDER OF YOUR PERSONAL
INCOME AS -- >> I HAVE TO INTERRUPT YOU.
>> GO AHEAD. >> YOU NEED TO WALK THROUGH WHAT
CONSTITUTES A SMALL BUSINESS. BECAUSE WHEN YOU SEE THAT YOU GO
GREAT, THIS IS FOR A MOM AND POP STORE.
A MOM AND POP STORE, PRESIDENT TRUMP HAS OVER 500 LLCs.
THAT'S LAW FIRMS AND HEDGE FUNDS.
>> RIGHT. SO THE AVERAGE INCOME FOR ONE OF
THESE PASS THROUGH BUSINESSES IN AMERICA IS OVER $750,000.
>> SAY THAT AGAIN. >> $750,000 FOR MOST PASS
THROUGH BUSINESSES. RIGHT?
THE AVERAGE HOUSEHOLD, THE MEDIAN HOUSEHOLD INCOME IN THE
UNITED STATES IS $59,000. YES, WHILE THERE ARE SOMEE
LEGITIMATE BUSINESSES THAT USE THIS PASS THROUGH SYSTEM THAT
WILL BENEFIT FROM BEING ABLE TO WRITE OFF YOUR EXPENSES AND THEN
PAY 25% OPPOSED TO THE 35% THAT THE PERSONAL TAX RATE WILL BE OR
39.6% TODAY. DON'T BE FOOLED INTO THINKING
THIS IS ABOUT ALL SMALL BUSINESSES.
THIS STILL OVERWHELMINGLY SUPPORTS THOSE WHO ARE HIGHER
EARNERS IN THIS COUNTRY. THOSE ARE THE DETAILS WE'VE GOT
RIGHT NOW. SOME OF IT HAS BEEN REPORTED BY
"THE WASHINGTON POST" THIS MORNING.
THE PLAN AIMS TO CUT TAXES BY MORE THAN $5 TRILLION OVER TEN
YEARS. AND HERE'S THE INTERESTING PART.
IT'S GOING TO RECOUP PARTICIPANT OF THAT.
YOU'LL KEEP THE MORTGAGE TAX BREAKS AND CHARITABLE TAX
BREAKS. BUT A LOT OF THE TAX BREAKS YOU
HAVE ARE GOING TO DISAPPEAR. MIGHT BE A GOOD THING.
MIGHT BE A BAD THING. WE'VE GOT A LOT OF TAX BREAKS IN
THIS CODE. >> WE DON'T SEE A BORDER
ADJUSTMENT TAX WE HEARD ABOUT. WE DON'T KNOW ABOUT CAPITAL
GAINS. THERE'S STILL A LOT REMAINS TO
BE SEEN. AND IN DEFENSE OF THE PLAN,
REMEMBER, THIS IS THEIR FIRST SWIPE AT IT.
>> IT'S NOT THE WORST PLAN IN THE WORLD.
THE CHARACTERIZATION OF IT AS