President Trump held a press conference where he laid his framework for his promised plans of tax reform for both individuals and corporations. Something had changed from his campaign promises though. He left out directly naming the actual effect of such tax cuts on federal budget deficits and levels. The framework that Trump laid out contained for guiding principles: a simple and easy to understand tax code, more globally competitive tax rates on businesses, tax cuts for the middle class, and a reduction on taxes for corporations that repatriate their profits from overseas.
These guiding principles differ from what he laid out on the campaign trail insofar as he previously said his four guiding principles were: a reduction in taxes for the middle class, simplification of the tax code, changes in the corporate tax code to help grow the economy as a whole, and do all of this without adding any digits to the the debt or trade deficit of the government. Knowing both of these guideline sets put out by Trump we notice that Trump got rid of concern on debt and deficit neutrality as one of the primary factors for tax reform, and broke up the corporate framework into two entirely separate principles which are lowering their tax rates and repatriating money. Previously he had included these two parts as one.
The matter of the national debt and deficit is a key issue in Washington, and always has been. Laws are much easier passed if they do no add further to the federal deficit. It's kind of like an unspoken guideline that has become a norm. Unfortunately for the American taxpayer, this oftentimes means that they will foot the bill to pay against the deficit in order so the laws don't appear to be adding to it.
It's currently unfair to say that the change of verbiage to the president's tax framework indicate a concrete change in policy. It's anyone's guess if the president's intentions were to play along with the unspoken Washington norm of avoiding an increased deficit due to their policies or if this was merely a sign that tax reform is just that important to allow the deficit to stand in its way.
President Trump, without going into too much details said that taxes on corporations in the US are far higher than that of other countries at 35%. He noted that many other large economic powerhouses only charge businesses around 515 and that he endeavors to get America to become more competitive by reducing the said corporate tax so that the US can compete fairly with other nations.
With not really any major political wins, the stakes are high for Republican leaders to to make something 'yuuuuge' happen prior to next years midterm elections. Simply put, the GOP needs to put some 'wins' on the board. To make these goals materialize more difficult, there is a seriously large workload awaiting Congress in September attached with mounting pressure to expedite getting funding for the government and raise the debt limit, and now, make some key decisions on expenditures related to the Harvey catastrophe and its aftermath.
With that said, the Trump administration hopes that they can get Congress to pass a series of tax reform bills by the end of the year, with or without the Democrats approval. Sources inside the White House have said that if Democrats cannot get on board they have other maneuvers they can utilize that do not require any Democratic votes.
In the end, let's hope that the country benefit's from the simplified tax codes and the repatriation of money back to the USA, among other measures that would also be included with the reforms.