President Trump said Thursday he doubts he’ll have to hike tax rates for the rich in order to get a tax overhaul through Congress, dialing back his comments a day earlier that the wealthy could end up paying more under his plan.
But he kept hammering home the message that the big winners will be the middle class.
“The wealthy Americans are not my priority. My priority are people in the middle class and that’s where we are giving the big tax reduction,” the president told reporters at an airport in Fort Myers, Florida, as he headed to survey hurricane damage.
Mr. Trump is trying to dent Democrats’ chief argument against the GOP’s tax plans, saying that while the poor and middle class should see breaks, the wealthy should — if anything — pay more, in order to keep the government running.
At a White House meeting with Democrats and Republicans on Wednesday, the president said: “The rich will not be gaining at all with this plan … If they have to go higher, they’ll go higher, frankly.”
Republican congressional leaders want to see tax breaks across the board, arguing that’s the only way to make sure businesses and private investment get a boost.
“What the president is saying when he says this isn’t about the rich — that’s true,” said Grover Norquist, president of Americans for Tax Reform and a close ally of the White House on the issue. “This is about job creation — it’s about everybody.”
But polls show that Mr. Trump, the wealthiest president in modern times, could be vulnerable to the Democrats’ class warfare rhetoric.
“Trump realizes he has to frame the debate and take away a lot of the Democrats’ messaging game and this is exactly what he’s doing,” said Republican strategist Ford O’Connell. “He’s taking a dagger to the Democrats’ messaging even before it gets out of the gate.”
Mr. Trump’s mixed signals have not derailed the tax overhaul effort, with congressional Republicans promising a framework will be released soon detailing the direction they want to go.
But whatever they release will now be compared to the president’s yardstick.
“I can tell you one thing,” said Senate Minority Leader Charles E. Schumer. “If the president’s tax plan repeals or rolls back the estate tax, it’ll be clear that a lot of his plan benefits the very rich, contrary to all his words.”
Mr. Schumer, who talked taxes with Mr. Trump at a White House dinner this week, said the president’s top economic adviser, Gary Cohn, has claimed that nobody actually pays the estate tax.
“What they mean of course, is that people rich enough to be levied estate taxes can find ways around paying them — they can afford all of those lawyers and estate planners,” he said.
Democrats have focused on the top 1 percent, those making more than $389,000 a year, who also pay about half of all U.S. income tax revenues. Mr. Trump hasn’t said what he considers the cutoff for the wealthy.
Tax-cutters say that the wealthy have to be included in any new breaks, or else it will be impossible to square with the goal of lowering the corporate tax rate. Most small businesses pay taxes as pass-through corporations, under the individual income tax code.
But Sen. Ron Wyden, the top Democrat on the Finance Committee, described the special rate for small business as a “lunar crater-sized loophole” for the wealthy to exploit.
Treasury Secretary Steven Mnuchin said the wealthy wouldn’t get a net benefit because any lowering of rates would be offset by deductions that would also be eliminated.
“Even if we do end up with a slight reduction on the high end, that will be offset by a reduction of deductions so that their taxes won’t go down,” Mr. Mnuchin said at an event Thursday hosted by Politico.
Sen. Orrin G. Hatch, chairman of the Senate Finance Committee, said many of the proposals being discussed, like an expanded standard deduction, would be a boon for the middle class.
“While I can’t see into the hearts of every member of the Congress, I truly don’t know of a single Republican who, when thinking about tax reform, asks themselves what they can do to help rich people,” he said at a hearing his committee convened on the subject Thursday. “That has never been our focus, and it is not our focus now.”
But Sen. Pat Toomey, Pennsylvania Republican, said lawmakers shouldn’t feel like they need to exclude productive, successful people who pay a disproportionate share of the taxes in the country.
“In my view, we ought to have a very pro-growth tax code that’s going to encourage an economic expansion, and if along the way a relatively wealthy person manages to benefit from that, I for one am not going to lose any sleep at all,” Mr. Toomey said at the hearing.