Donald Trump hints taxes for rich might rise

  • 14/09/2017
donald trump
The President is pursuing a tax code overhaul in a push to win support. Photo credit: Getty

US President Donald Trump has hinted that taxes on rich Americans may rise, as he pursues a tax code overhaul and reaches out to both Democrats and Republicans in a push to win support for a plan still far from complete.

As Mr Trump prepared to host the two top congressional Democrats at a White House dinner on Wednesday night, Treasury Secretary Steven Mnuchin told Fox News that the administration's tax cuts could be paid for through economic growth.

The White House and the Republican-led Congress have not put forth a detailed tax plan, despite months of high-level talks that had until recent days excluded Democrats.

House of Representatives Speaker Paul Ryan said an outline of a plan would be unveiled during the week of September 25, with congressional tax-writing committees crafting detailed legislation in the subsequent weeks.

Mr Mnuchin told Fox the administration would use its own economic assumptions to gauge the impact of its tax cuts on the federal budget deficit and the $US20 ($A25) trillion national debt, a key issue in Washington's intensifying tax debate.

"It will be revenue neutral under our growth assumptions," Mr Mnuchin said. The administration believes that tax cuts will lead to much faster growth than do congressional analysts or private forecasters.

"So, we can pay for these tax cuts with economic growth," he added.

As for taxing the rich, Mr Trump said after a meeting with lawmakers that the wealthy "will not be gaining at all with this plan. ... If they have to go higher, they'll go higher, frankly."

Further details were not immediately available from the White House.

Democrats have criticised Republican tax overhaul efforts as benefiting mainly the wealthiest Americans and corporations.

Tax experts say Mr Trump could raise taxes on high-income earners by lowering the cap on mortgages eligible for interest deductions to $US500,000 from $US1 million. Another step might be to close a loophole that lets Wall Street fund managers pay low taxes on much of their income, analysts said.

Mr Trump may also propose eliminating the deduction for state and local taxes, then use the revenue raised to fund tax cuts for the middle class, leaving top earners with a higher effective tax bill. There has also been talk in the Senate about increasing tax rates on capital gains and dividends.

But even with those changes, analysts say it's not clear top earners would end up paying more overall, partly because Mr Trump has also proposed cutting the top individual tax rate.

Mr Trump is hosting Senate Democratic leader Chuck Schumer and House Democratic leader Nancy Pelosi to discuss the legislative agenda with a focus on the tax overhaul after meetings with bipartisan groups of lawmakers on Tuesday night and Wednesday afternoon.

"We should be able to come together to make government work for the people," Mr Trump told reporters as he met with eight Democratic and five Republican House members to try to find common ground on taxes as well as immigration and healthcare.

Asked what his message was to skeptical conservatives who worry he is cozying up to Democrats, Mr Trump said: "I'm a conservative, and I will tell you I'm not skeptical. And I think that if we can do things in a bipartisan manner, that'll be great. Now it might not work out."

Mr Trump blindsided Republican leaders last week by striking a deal with Mr Schumer and Ms Pelosi on the US debt limit and federal spending for three months.