Goldman Sachs: Here's how Trump's tax reform could go wrong

To counter this though, is Trump's plan for small businesses which, according to CBS News, account for roughly 95 percent of businesses in the U.S. Small businesses are now taxed as high as 39.6 percent (equivalent to the top income tax bracket), but under the Trump tax plan this will be cut to 25 percent, incentivizing growth in both employment and profits for small businesses. "I don't think any of them are non-competitive in the world because of the corporate tax rate", Buffett, the chairman and CEO of Berkshire Hathaway Inc, told CNBC. That's why Senate Minority Leader Charles Schumer warned Trump on Wednesday that Democrats would not support any tax reform plan that helps the wealthiest American earners. As the chart below shows, the share of federal income taxes paid by the highest-earning 10 percent has steadily risen-from 49 percent in 1980 to 71 percent by 2014. "We need to have the growth", Mulvaney said.

Republican lawmakers including Representative Peter King, who represents Long Island, and Leonard Lance of New Jersey, have indicated resistance to a bill that would end the state and local tax deduction. Corker said on NBC's "Meet the Press".

Under current law, families don't have to pay federal income tax on money they use to cover their local tax bills.

"We're going to work our way through that", he said. High-tax states tend to lean Democratic, and GOP leaders are not counting on their support for a tax overhaul.

Eliminating state and local deductions along with personal exemptions would generate about $2.9 trillion in revenue over a decade, according to an analysis by the Urban-Brookings Tax Policy Center. The Senate budget committee's 2018 budget resolution announced Friday lays the groundwork for a repeat of the sorry legislative process used in the failed ACA repeal.

Trump and the Republicans won the election by promising jobs and prosperity.

One thing that hasn't changed since then?

What is better still about this tax plan is that it strives not only to cut income taxes but also to simplify them. For their part, Americans overwhelmingly believe the tax code is overly complex, a point the president underscored. It also repeals the Alternative Minimum Tax and estate tax, which hit high earners and the wealthy, respectively.

Last week, while President Donald Trump was busy facing criticism for his increasingly languid response to the hurricane that ravaged Puerto Rico, his top economic adviser quietly confirmed that it's "fine" for corporate executives to use "tax repatriation holidays" to enrich themselves.

House Speaker Paul Ryan, R-Wis., and Treasury Secretary Steven Mnuchin defended the newly released GOP tax plan as a boon for the middle class amid accusations from Democrats and some outside groups that it is primarily a chance to cut taxes on corporations and the wealthy. Hatch cast doubt on the prospect, saying he prefers to limit it to three brackets, but hinted that political pressure could motivate the White House to add a fourth one.

Across Washington, lobbyists of all stripes have been waiting for months to see tax details and keeping their powder dry until full details are revealed - suggesting that ready-made opposition awaits actual tax legislation.

Importantly, our plan will maintain important tax incentives for home mortgage interest, charitable giving, retirement, and education.

Does this mean progressives should consider supporting Trump's trillion-dollar cuts?

  • Jo Lloyd