Trump Discusses New Tax Plan, Texas and Florida Hit by Job Loss
October 23, 2017
Trump voices support for higher tax bracket for wealthy in new tax plan; Trump promises no changes to 401(k) in proposed tax plan; Florida, Texas lose 135,000 jobs in midst of hurricanes, but likely to rebound.
- Trump voices support for higher tax bracket for wealthy in new tax plan. President Trump has voiced support for a higher tax bracket for the wealthy after Republicans received criticism that their tax overhaul would mostly benefit rich Americans. The Republican tax plan released last month proposed reducing the seven tax brackets to three, and cutting the top rate from 39.6 percent to 35 percent. Yet on Friday, House Speaker Paul Ryan said that the plan would include a fourth bracket to ensure that “we don’t have a big drop in income tax rates for high-income people.” The move comes after the non-partisan Tax Policy Center estimated that the preliminary tax plan with three tax brackets would reduce the federal government’s revenues by $2.4 trillion over the next decade and $3.2 trillion in the following 10 years, and would primarily benefit the wealthiest Americans and hurt the upper middle class. Mitch McConnell, leader of the Senate Republicans, said on Sunday that he expects the legislation to be passed by the end of the year. [Financial Times]
- Trump promises no changes to 401(k) in proposed tax plan. President Trump said early on Monday that his proposed tax plan would not change Americans’ tax-deferred retirement plans, pushing back against reports that Republicans are considering a proposal that would significantly reduce the income workers can save in these retirement savings programs. Mr. Trump turning down the proposal could disrupt Congressional Republicans’ efforts to pass a sweeping overhaul of the tax code. Republicans’ ability to win passage of a tax passage depends on its ability to overcome a complex set of legislative restrictions in the Senate. Republicans are attempting to cut business tax rates and individual tax rates significantly, using a legislative route allowing them to bypass a Democratic filibuster and pass a bill with a simple Senate majority. In order to accomplish this, they will need to make a few difficult political choices, eliminating some popular tax breaks, or employing some budgetary accounting trick to offset lost revenues from rate cuts. [NYTimes]
Economic Indicators & News
- Florida, Texas lose 135,000 jobs in midst of hurricanes, but likely to rebound. Florida and Texas shed nearly 135,000 jobs in the wake of hurricanes that battered the Southern and Eastern U.S. However, broad reconstruction efforts and increased consumer spending will likely lead to a rally in jobs and help the states to rebound. Florida lost 127,400 jobs in September, seasonally adjusted, as Hurricane Irma swept through the state, while Texas lost 7,300 jobs in the same month after Harvey, according to data released by the Bureau of Labor Statistics. Before the storms, Florida had been adding about 19,000 jobs a month since January, while Texas added about 24,000 jobs a month since the beginning of 2017. The states and surrounding regions are likely to see these numbers rebound in the coming months as construction workers and temporary openings increase. [WSJ]