Hours after President Donald Trump suggested he would be fine with a tax bill that raised rates on the richest Americans, a senior White House aide tried to walk back the idea.
At the start of a mid-afternoon meeting with Republican and Democratic lawmakers, Trump told reporters that the wealthiest Americans “will not be gaining at all with this plan.”
“We are looking for the middle class and we are looking for jobs — jobs being the economy. So we’re looking at [the] middle class and we’re looking at jobs,” the president said. “I think the wealthy will be pretty much where they are, pretty much where they are. If we can do that, we’d like it. If they have to go higher, they’ll go higher, frankly.”
It was the latter few words that appeared to signal Trump’s openness to throwing his support behind higher rates for the wealthiest Americans. Doing so would help him in his quest to garner Democratic support for the yet-finalized tax package.
On a call with a handful of reporters about Trump’s recent meetings with members of both parties, Marc Short, Trump’s legislative affairs director, tried to clarify the boss's remarks.
Trump was not signaling his willingness to hike rates for the wealthiest — or any — Americans, Short said.
But the richest Americans could end up paying more to the IRS each year if he signs into law a measure that targets tax deductions Short said, adding, “He is not looking to raise rates.”
“What he is observing is … the wealthiest are best able to take advantage of deductions, and if we are simplifying the tax code and eliminating some of those deductions, there are scenarios where some in the upper income brackets may have a higher pay to the IRS,” Short said.
A good sign?
Several House members who participated in the meeting said they took Trump’s comment about not planning to lower taxes for the rich — and him being open to them paying more — as a good sign he wanted to work across the aisle.
Although none had explicitly said they interpreted his comments as indication he was open to increasing the top individual tax rate, it’s unclear how the White House’s backtracking might change their feelings about the gesture the comment represented.
When a Democrat in meeting mentioned to Trump that they want to ensure any tax plan helps middle-income earners, Rep. Henry Cuellar said Trump responded by saying, “‘Oh yeah, absolutely, this is for the middle class. I’m not asking you to go out there and say this is a tax cut for the rich.’”
“He says, ‘In fact, the rich are going to stay the same,’” the Texas Democrat added. “And then he looks up — because I was watching everything he was saying — he looks up, he says, ‘Maybe they’ll pay a little bit more, but for sure they’re going to stay the same.’” Cuellar said he does believe the White House is serious about trying to work with Democrats.
“He did say, ‘Hey, you know imagine we do something. They’re not going to expect this from us,’” he said. “And he said, ‘They’re certainly not going to expect this from me’ — doing bipartisan work. So he said, ‘We’re going to give it a shot. If it doesn’t [work], we go back to the way it was.’”
New York Republican Rep. Tom Reed also got the sense Trump was serious about producing a bipartisan accord. Because of that, Reed said, he walked away from the meeting more optimistic than ever that a tax overhaul will get done.
“Clearly up here on the Hill I think the partisan play here is alive and well, and that’s the way folks want to go,” the Ways and Means Committee member said. “And if that works, God bless them. But at the end of the day I think the White House gave clear indication to me they’re looking to cut a deal and they want governing pragmatic members on the other side to negotiate in good faith. And what you had in the room there were those members.”
Reed said the biggest indication of that was when Trump brought the press in and publicly stated that he’s not going to cut taxes on the wealthy and would even consider increasing taxes on the wealthy.
‘Loud and clear’
“I heard loud and clear that he’s looking to cut a deal because that’s contrary to anything that’s been stated from the partisan approach to date,” he said.
Another Republican present for the meeting seemed to push back on the notion of not lowering taxes on the rich.
“While I agree with the president’s focus on creating jobs and lowering taxes on the middle class, I will continue to fight to lower taxes for every American,” Georgia GOP Rep. Drew Ferguson said in a statement.
As part of the tax discussion New Jersey Democrat Josh Gottenheimer said he told Trump he feels strongly about keeping the state and local deduction as part of a tax overhaul. Trump, whose home state of New York, like New Jersey, is a high-tax state that benefits from the deduction, did not tip his hand, however, saying only that he knows and understands the issue, Gottenheimer said.