Little detail in Administration plan, but wealthy to benefit and possible $3 trillion to $7 trillion rise in Federal Government deficit

Developments on Day 97 of the Trump Administration:

Administration Proposes Tax Cuts, But With Little Detail

Seeking a highlight before its 100th day in office, the Trump Administration proposes reductions in individual and business income tax rates and a reform of the tax code that will significantly benefit the wealthy and increase the Federal Government’s deficit.

However, the Administration offered no detail of how the plan will be financed.

The outline of a tax package was unveiled at the White House in a single-page statement with bullet points by Treasury Secretary Steven Mnuchin and Gary D. Cohn, the director of the National Economic Council. There was no detail on phase-in periods, financial impact on individuals, or explanations of potential benefits.

Instead, Cohn proclaimed, “We have a once-in-a-generation opportunity to do something really big. President Trump has made tax reform a priority, and we have a Republican Congress that wants to get it done.”

The headline of the proposal is the reduction in corporate tax rate from 35% to 15%. Individual income tax brackets would be reduced from seven to three — 10, 25 and 35% — though no income ranges were given for each bracket.

Individual tax rates currently have a ceiling of 39.6% and a floor of 10%.

Estate tax and the alternative minimum tax, a parallel system that effectively limits deductions and other benefits available to the wealthy, will be abolished. Corporations will not have to pay taxes on their foreign profits, despite the Trump Administration’s “America First” rhetoric, and they will have a one-time opportunity to bring home cash that they are holding overseas at a reduced tax rate.

The Administration wants to double the standard deduction for individuals, effectively eliminating taxes on around $24,000 of a couple’s earnings, and scrap most itemized deductions, such as those for state and local tax payments.

The proposed changes could increase the deficit by an estimated $3 trillion to $7 trillion over the next decade, according to an estimate by the Committee for a Responsible Federal Budget.

Treasury Secretary Mnuchin insisted, “This [plan] will pay for itself with growth and with reduction of different deductions and closing loopholes. The economic plan under Trump will grow the economy and will create massive amounts of revenues, trillions of dollars in additional revenues.”

But analysts as well as Democratic legislators were sceptical. Bernard Baumohl, the chief global economist at the Economic Outlook Group, wrote clients:

The effort to introduce more fiscal stimulus into the economy is genuinely underway. But the bare bones plan we saw unveiled today is already conceptually flawed and unlikely to go far in Congress. The final product will bear no resemblance to the principal points highlighted in today’s meager release. Certainly, the first step in this process was unimpressive.

The proposal is also likely to face resistance by some GOP members of Congress. The White House did not include the “border adjustment tax” on imports at the center of a plan developed by House Speaker Paul Ryan of Wisconsin and Kevin Brady, the chairman of the Ways and Means Committee.

Ryan and Brady issued a joint statement with Senate Majority Leader Mitch McConnell and Orrin Hatch, the chairman of the Senate Finance Committee, that Wednesday’s proposal would “serve as critical guideposts” as Congress and the Administration worked together.

However, Mark Sanford of the conservative Freedom Caucus said, “Anything that completely spikes the ball with regard to deficits going forward I think will be problematic within the Congress.”

TOP PHOTO: Gary Cohn, Director of the National Economic Council, and Treasury Secretary Stephen Mnuchin present Trump Administration’s bullet points for tax cuts and reform, April 26, 2017 (Stephen Crowley/New York Times)

Defense Department Confirms Investigation of Flynn Over Foreign Payments

The Defense Department confirms that it is formally investigating Michael Flynn, former National Security Advisor and once head of the Defense Intelligence Agency, over payments to him and his firm from Turkey and Russia.

FLynn received about $530,000 from Turkish interests and more than $55,000 from Russian State agencies and individuals linked to President Vladimir Putin in 2015-2016, as he joined the Trump campaign.

The letter from Inspector General Glenn A. Fine to the ranking GOP and Democrat members of the House Oversight Committee, Jason Chaffetz and Elijah Cummings, said Flynn had “failed to obtain required approval prior to receiving any emolument from a foreign government.

Flynn was warned in 2014, when he was head of the DIA, not to take foreign money without permission but did not seek authorization when subsequently approached by foreign clients, according to the Inspector General. The regulation applies both to current and retired military personnel.

Senators: Unclear What Trump Doing Over North Korea

Senators at a White House briefing on North Korea say it was unclear what the Trump Administration will do about Pyongyang’s missile and nuclear testing.

All 100 senators were invited to the classified briefing led by Secretary of State Rex Tillerson and Defense Secretary James Mattis. Some who attended said the officials did not discuss whether the US is considering military options, nor they did mention putting North Korea back on the list of nations that sponsor terrorism, as some lawmakers want.

Donald Trump spoke for a few minutes. His comments, said an attendee, were “long at the 30,000 foot, short on the specifics.” Though the session was classified, everything said was in the public domain.

“It’s a very serious situation. As I knew before I went there,” said John McCain, who chairs the Senate Armed Services Committee. “I knew all about it. I didn’t hear anything new because I have been heavily briefed.”

Ivanka Trump Breaks With Father Over Syrian Refugees

Ivanka Trump rejects her father’s intention to ban all Syrian refugees from entering the US.

Ivanka Trump said in an interview, “I think there is a global humanitarian crisis that’s happening, and we have to come together and we have to solve it.”

Asked whether this includes admitting Syrian refugees to the US, she replied: “That has to be part of the discussion. But that’s not going to be enough in and of itself.”

Two advisors to Donald Trump knocked back the remarks as a political misstep. They said the comments revealed a White House debate in which Ivanka Trump and her husband, Jared Kushner, are facing chief strategist Steve Bannon and policy advisor Stephen Miller.

Breitbart, the conservative site formerly run by Bannon, posted a critical article about the remarks with thousands of comments questioning Ivanka Trump’s commitment to her father’s causes.