Donald Trump Urges Democrats to Join Him on Tax Overhaul

By Louise Radnofsky, Richard Rubin and Siobhan Hughes Features Dow Jones Newswires

President Donald Trump called on Democrats to support him in overhauling the tax code on Wednesday, fresh off a debt-ceiling and spending deal with the party leaders that amounted to an end-run around top Republicans lawmakers.

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Speaking in North Dakota, Mr. Trump was joined onstage by Sen. Heidi Heitkamp, a rare Democratic senator who has signaled she could back his still-forming tax proposal. The president described his tax plans as a "once-in-a-generation opportunity" to make "the greatest tax reduction in the history of our country."

While Republican leaders in Congress emphasize a broader tax overhaul that would lower tax rates while removing some tax breaks, Mr. Trump homed in on tax cuts, promising lower burdens on businesses, estates and individuals. The Trump administration has released few details on the plan and top policy makers huddled with the president earlier this week at the White House.

In his speech, Mr. Trump specifically backed a bigger standard deduction, a larger child tax credit and repeal of the estate tax. Mr. Trump also said owners of pass-through businesses -- which report profits on their owners' individual returns -- would benefit from the plan. Mr. Trump, as an owner of pass-through businesses, could benefit from the plan.

The GOP-controlled Senate could pass a tax bill as long as it secured support from 50 or 51 of the Republican party's 52 senators there, using a parliamentary procedure known as reconciliation, rather than the 60 votes usually needed to advance legislation.

But Sen. John Cornyn, a Texas Republican and member of the Senate leadership team, said Wednesday that he preferred to focus on getting votes from some Democrats, adding that such an approach would free lawmakers from some of the limits of the reconciliation procedure.

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Asked if he thought that was possible, he replied: "We're going to try. We're going to start in the Finance Committee, try to do a bipartisan markup, we'll also pass a budget resolution to get reconciliation instructions as a fallback, but we're going to try."

Senate Majority Leader Mitch McConnell (R., Ky.) had indicated he intended to use the reconciliation process as the primary mechanism for pursuing a tax-policy overhaul and lower rates. He cited a letter from 45 of the 48 current Democratic senators that stated their opposition to any plan that added to the deficit or cut taxes on the richest Americans.

Ms. Heitkamp, up for re-election in 2018, is one of the three Democratic senators who didn't sign the letter cited by Mr. McConnell. She flew to the event in Air Force One and joined the president on stage, along with North Dakota Republican leaders, business leaders, and at one point, the president's daughter Ivanka Trump.

With control of Congress and the White House, the GOP has looked forward to the tax debate for the first seven months of Mr. Trump's presidency, particularly during a prolonged and bruising battle over the party's pledge to overturn and replace the 2010 Affordable Care Act.

On the way to North Dakota, Mr. Trump announced he had agreed to a proposal by Senate Minority Leader Chuck Schumer (D., N.Y.) and House Minority Leader Nancy Pelosi (D., Calif.) for a three-month extension of both government funding and a three-month increase in the debt limit as part of a Hurricane Harvey aid bill. House Speaker Paul Ryan (R., Wis.) had sharply criticized the plan.

White House aides characterized the deal as a move to clear the decks for Congress to focus on tax policy, though that raises the prospect of a fresh crisis when the deal expires Dec. 15, right as lawmakers had eyed finishing up a tax deal.

Mr. Trump repeated in his speech an incorrect statement that he made frequently during the presidential campaign, that the U.S. is "the highest taxed nation in the world."

Compared with other major developed countries, the U.S. tax burden is low, largely because the country lacks a value-added tax on consumption.

Write to Louise Radnofsky at louise.radnofsky@wsj.com, Richard Rubin at richard.rubin@wsj.com and Siobhan Hughes at siobhan.hughes@wsj.com

(END) Dow Jones Newswires

September 06, 2017 20:14 ET (00:14 GMT)