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story.lead_photo.caption President Donald Trump talks with reporters as he departs from the South Lawn of the White House via Marine One in Washington, Saturday, Dec. 16, 2017, to spend the weekend at Camp David in Maryland. (AP Photo/Susan Walsh)

WASHINGTON -- President Donald Trump on Saturday defended the Republican tax cut legislation as a good deal for the middle class.

"It'll be fantastic for the middle-income people and for jobs, most of all," Trump told reporters on the White House lawn before traveling to Camp David, Md., where he planned to meet with Vice President Mike Pence and Treasury Secretary Steve Mnuchin.

"And I will say that because of what we've done with regulation and other things, our economy is doing fantastically well, but it has another big step to go, and it can't take that step unless we do the tax bill," he said.

The tax overhaul legislation, which the GOP aims to vote on this week, would lower taxes on the richest Americans. Benefits for most other taxpayers would be smaller, but Trump called the bill a "Christmas present" for middle-class Americans, saying it would trigger job growth and push the economy beyond its current 3 percent rate of growth.

"I think we could go to 4, 5 or even 6 percent, ultimately," the president said. "We are back. We are really going to start to rock."

The nation last topped 5 percent growth in 1984.

The Republican plan is the widest-ranging reshaping of the tax code in three decades and is expected to add to the nation's $20 trillion debt. The tax cuts are projected to add $1.46 trillion over a decade.

The bill would offset the tax cuts in part by repealing an important part of President Barack Obama's Patient Protection and Affordable Care Act -- the requirement that all Americans have health insurance or face paying penalties. With more people opting out of health insurance, the government would spend less on subsidies to help insure them.

Sen. Marco Rubio, R-Fla., relented in his high-profile opposition after negotiators expanded the tax credit that parents can claim for their children. He said he would vote for the measure this week.

Sen. Bob Corker of Tennessee, the only Republican to vote against the Senate version earlier this month, says now that he will support the legislation. Corker, the chairman of the Senate Foreign Relations Committee, has repeatedly warned that the nation's growing debt is the most serious threat to national security.

"I realize this is a bet on our country's enterprising spirit, and that is a bet I am willing to make," Corker said.

The bill embodies a long-standing Republican philosophy that lower taxes for businesses will trigger economic growth and job creation for Americans, eventually paying for themselves with higher tax revenue. Skeptical Democrats are likely to oppose the legislation unanimously.

"Under this bill, the working class, middle class and upper middle class get skewered while the rich and wealthy corporations make out like bandits," said Senate Minority Leader Charles Schumer of New York. "It is just the opposite of what America needs, and Republicans will rue the day they pass this."

HOME OWNERSHIP

The bill would allow homeowners to deduct interest only on the first $750,000 of a new mortgage, down from the current limit of $1 million.

The deduction that millions use in connection with state and local income, property and sales taxes would be capped at $10,000. That's especially important to residents of high-tax states such as New York, New Jersey and California.

The standard deduction -- used by around two-thirds of households -- would be nearly doubled, to $24,000 for married couples.

Those three provisions upend decades of assumptions that society is better off with homeowners instead of renters. The increase in the standard deduction reduces the incentive to buy homes by making far fewer homeowners eligible for preferential tax treatment.

Today, a little under half of U.S. homes are worth enough to justify itemizing mortgage interest and property taxes. Under the tax legislation, that figure would fall to close to 14 percent, according to an analysis of the plan by the online real estate marketplace Zillow.

"It suggests a limit in the federal government's willingness to subsidize ownership," said Edward Glaeser, an economist at Harvard. "It's also a reflection of just how expensive housing has become, and how it feels problematic to be using the tax code to support people buying houses that are this expensive or, even worse, to be encouraging housing prices to rise further."

Both parties have long championed homeownership as a way to help people build wealth and keep neighborhoods more stable. But economists like Glaeser have been critical of the resulting subsidies.

In their view, the government has made homeownership and its financing artificially cheap through the tax code and mortgage backers like Fannie Mae. As a result, people are encouraged to take on more debt than they might otherwise -- to buy bigger homes and second homes, and to plow the equity they accrue into renovations and personal spending.

Critics say that because the benefits of interest deductions grow with larger and more expensive homes, the bulk of the benefits accrue to wealthier homeowners in pricier markets. This alters the landscape by encouraging more single-family homes and suburban sprawl. That, in turn, prompts the government to spend more on roads and infrastructure and makes housing a bigger portion of the economy than it would be in the absence of federal help.

All this has made homeowner subsidies, in particular the mortgage interest deduction, one of the rare tax breaks with critics across the political spectrum. Edward Pinto, co-director of the conservative American Enterprise Institute's Center for Housing Markets and Finance, has described the interest deduction and other homeowner subsidies as a wasteful giveaway that inflates home prices and encourages people to borrow excessively.

"My basic view is if you subsidize something, you'll get more of it, and as a country we've been subsidizing debt," he said.

TOP TAX BREAKS

Also under the bill, today's 35 percent rate on corporations would fall to 21 percent. Trump and GOP leaders had set 20 percent as their goal but agreed to 21 percent in order to fund other tax cuts that won over lawmakers in final talks.

"This is happening. Tax reform under Republican control of Washington is happening," House Speaker Paul Ryan of Wisconsin told rank-and-file members in a conference call Friday. "Most critics out there didn't think it could happen. ... And now we're on the doorstep of something truly historic."

The bill would also drop the 39.6 percent top rate on individuals to 37 percent.

The $1,000-per-child tax deduction would grow to $2,000, with up to $1,400 available in Internal Revenue Service refunds for families that owe little or no taxes. Parents would have to provide children's Social Security numbers to receive the child tax credits, a measure intended to deny the credit to people who are in the U.S. illegally.

Deductions for medical expenses that lawmakers once considered eliminating would be retained.

People who inherit fortunes would get a big break. The bill would double the exemption, meaning the estate tax would apply only to the portion of an estate over $22 million for married couples. In other words, a couple inheriting $50 million would pay taxes only on $28 million.

Members of a House-Senate conference committee signed the final version of the legislation Friday, sending it to the two chambers for final passage this week.

Information for this article was contributed by Jonathan Lemire, Stephen Ohlemacher, Marcy Gordon and staff members of The Associated Press; and by Conor Dougherty of The New York Times.

A Section on 12/17/2017

Print Headline: Trump lauds tax bill as middle-class boon

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  • TimberTopper
    December 17, 2017 at 7:16 a.m.

    Trump as usual is lying! The filthy rich and corporations are the ones getting the boon. The middle class are getting screwed. The problem is, that it will be a while before the Trumptards know what's been done to them.

  • RBear
    December 17, 2017 at 7:22 a.m.

    There is no way this bill can generate the kind of growth Trump is boasting about. The economy is almost at full employment with those unemployed either lacking the skills needed for the jobs available or suited only for minimum wage jobs that don't provide the wages needed to sustain a household. As I've stated, if Trump really wanted to help the average American the federal minimum wage would have been raised in this bill.
    ...
    Instead, it will pass along large cuts to corporations who will pass the savings along to shareholders instead of raising wages and salaries of employees. Other savings will be invested in automation in both manufacturing and services to take advantage of AI innovations. That will further undercut the average American in lost jobs. (There is a subtle alternative that could benefit the economy. Let's see if anyone in here gets it.)
    ...
    This cut, like the last one passed under the Bush administration, will not be able to pay for itself, driving the country deeper in debt. It's a rushed bill with lots of mistakes that should have been vetted more closely. It's just a hacked attempt by Republicans to score ONE legislative victory in 2017 when they had control of the House, the Senate, and the White House. It's more from the underachieving party who has also nominated unqualified federal judicial nominees who don't even understand the basics of the legal process.

  • BoudinMan
    December 17, 2017 at 8:35 a.m.

    The next time these teabaggers do something to help the middle class, well, it will be the first time.

  • LevyRat
    December 17, 2017 at 8:55 a.m.

    Talk about fake news! The dim wits in the media keep repeating that the personal exemption was "doubled"! Really?

    I'm an over 65 conservative who voted for our buffoon President, so let me do the “math” to see my big “tax cut”.

    In 2018 without my “big” tax cut, I would have been able to take a $6,500 Standard Deduction plus another $1,850 over 65 deduction and $4,150 personal exemption for a total of $12,500 “Standard Deduction” …. Now with my “big tax cut”, my “Standard Deduction” is $12,000. Big tax cut???

    Corporate rates get cut from 35% to 21% and individual rates cut from 39.6% to 37% big “middle class tax cut”. LLCs no longer pay the top personal rate so they are cut from 39.6% to 25%, who most commonly uses an LLC, lawyers and what profession are most members of Congress? Lawyers.

    May I have the Vaseline, please.

  • WGT
    December 17, 2017 at 9:11 a.m.

    There has got to be two people in Congress on the conservative side of this issue with the common sense to realize the long term effects of this tax cut is nothing short of devastating.
    .
    Salient quote from the Internet-
    “Republicans are aiming in their every action to create a situation where America is underfed, underpaid, under-insured, un-educated, un-informed, unsafe, unable to vote, overpopulated, overarmed, and overly paranoid. The question is, WHY?”

  • PopMom
    December 17, 2017 at 10:17 a.m.

    Levyrat,

    Actually not all LLCs will qualify, and personal service companies--specifically lawyers and accountants got screwed. Apparently, engineers and architects get better treatment. There really is no rhyme nor reason as to which "businesses" get the 21% rate and which ones get walloped with 37%. We also are getting a $15,000 a year increase in taxes because we have lost our state and local tax deduction which is now capped at $10,000. I think that many people who think that they have tax cuts have not figured in the loss of the state and local tax exemption. There still may be hope if Susan Collins votes no, McCain is too sick to vote, and there is one more vote but I think Flake from Arizona is voting yes. This is a really messed up bill with changes for which there is no rhyme nor reason. This bill only will last a year though. It does not produce enough income to run the country, and there is going to be rioting when they try to cut back on Medicare, Medicaid, and Social Security.

  • RBear
    December 17, 2017 at 10:45 a.m.

    PM, saw that point regarding LLCs this morning on This Week. In fact, the LLC provision was thrown in at the last moment and apparently benefits Trump and some of his Republican cronies the most. The entire bill is a hack job that really doesn’t address the needs of the country. It’s more about maIntaining campaign promises than anything. There is no economic model that supports the growth assumptions Republicans have raised and their Laffer Curve models went out the door with the last cut. But I don’t think there’s a Republican voter who could even explain the Curve if they tried.

  • DontDrinkDatKoolAid
    December 17, 2017 at 1:01 p.m.

    The Laffer Curve has been proven twice in my life time. JFK, and Reagan. They knew how to apply the tax breaks. Trump is now on track of proving the Laffer Curve again.

  • RBear
    December 17, 2017 at 1:16 p.m.

    DDDK, it was applied a third time but failed during that one. You apparently didn't seem to be able to comprehend my analysis of the curve, pointing out we are past the optimal point and now in diminishing returns. When the marginal rate was in the 90 and 70 percent ranges it may have worked, but we are far beyond that where the decreasing the rates will not yield returns to pay for the cuts. Please provide more detailed explanation of why the curve will work now if it didn't work during the Bush cuts. Those put us $1.5 trillion in debt.

  • TimberTopper
    December 17, 2017 at 1:26 p.m.

    Koolaid, it didn't work for Reagan, as George H.W. Bush had to raise taxes to keep the economy/debt ratio in balance. Remove your head from the sand, or wherever it is! You are paying attention to too many of the bots and repeating what you've seen, thereby making you a Troll.

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