President Donald Trump hinted on Monday that a “phase two” of the tax cuts is in the works.
Speaking at an event at the White House honoring the World Series champion Houston Astros, Trump turned to House Ways and Means chairman Rep. Kevin Brady of Texas, and asked, “Kevin, are we going for an additional tax cut, I understand? Huh?”
The comment drew laughter from the room. The president continued: “He’s the king of those tax cuts, yeah? We’re going to do a phase two, I’m hearing that. You hear that, (Texas Sens.) John (Cornyn) and Ted (Cruz)? Phase two. We’re actually very serious about that, Kevin. So, it’s good.”
CNBC reported it is not clear what further changes to the tax code Brady and congressional Republicans may be considering.
Lowering the marginal tax rates further or reducing the number of tax brackets could be an area for further change.
The new law kept the seven brackets in place while marginally lowering the percentage each pays. The top rate moved down from 39.6 to 37 percent. Trump’s original plan proposed during his campaign called for reducing the number of brackets to three with the top rate being 25 percent.
The greater changes to the code in December came in doubling the standard deduction and child tax credit.
The change meant millions of lower-income Americans and working families saw their federal income tax bill go to zero. Due to the child tax credit, many families will actually receive a net payment from the federal government, beyond what would have been their tax liability.
Additionally, the new legislation lowered the corporate tax rate from 35 percent (which was among the highest in the industrialized world) to 21 percent, which is just below the global average.
The change sparked many corporations to announces bonuses, pay raises and other increased benefits impacting millions of American workers.
The tax code went through two major changes in the 1980s while Ronald Reagan was president.
The first legislation passed in 1981 implemented 25 percent across-the-board tax cuts, taking the top rate from 70 percent to 50 percent. The second phase in 1986 lowered the top rate to 28 percent and dropped the number of tax brackets to two: 28 percent and 15 percent. The corporate rate was also reduced from 48 percent to 33 percent.
In a statement released last week, the Trump White House lauded the benefits of the new tax law.
The chief executive noted that the unemployment rate is at a 17-year low and jobless claims are currently at levels not seen in 48 years, when the country had 100 million fewer people.
Additionally, over 4 million Americans have received bonuses, wage increases or other new benefits as a result of the law.
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