Fewer people will actually pay tax at that rate. Now, let me tell you what else they want to do. They want to nearly double the standard deduction. 12,000 for individuals. 24,000 for married couples. Thats the justification for raising the lowest tax rate from 10 to 12 that a whole lot of people arent actually going to pay for. The plan also calls for the elimination of the socalled marriage penalty. Raising the tax credit for a child under 17 by a yet to be specified amount. And look for a new 500 tax credit for nonchild dependents. That replaces the idea that you can actually otherwise claim nonchild dependents. In addition, the plan calls for repealing the estate tax. What a lot of republicans call the death tax. This benefits generally speaking the wealthy. It also repeals the Alternative Minimum Tax. At lot of you might say i pay the Alternative Minimum Tax. Heres the problem. It was actually meant to be something for the wealthy. Wasnt indexed to inflation so a
number of people in the middle class have been caught paying it. Make no mistake. Repealing the Alternative Minimum Tax opposed to indexing it to inflation is a boom for the wealthy generally speaking. There are exceptions to this. And i bet you youre going to tweet me about them any second now. On the business side, the plan calls for slashing the corporate rate to 20 from 35 . Donald trump had talked about 15 . Hard to get there. Theyve been trying to do that. But heres the interesting part. It also calls for a socalled pass through rate of 25 . Those of you with small businesses, youll know what this is. You can deduct expenses and pay the remainder of your personal income as i have to interrupt you. Go ahead. You need to walk through what constitutes a small business. Because when you see that you go great, this is for a mom and pop store. A mom and pop store, President Trump has over 500 llcs. Thats law firms and hedge funds. Right. So the average income for one of these pass through businesses in america is over 750,000. Say that again. 750,000 for most pass through businesses. Right . The average household, the Median Household Income in the United States is 59,000. Yes, while there are some legitimate businesses that use this pass through system that will benefit from being able to write off your expenses and then pay 25 opposed to the 35 that the personal tax rate will be or 39. 6 today. Dont be fooled into thinking this is about all small businesses. This still overwhelmingly supports those who are higher earners in this country. Those are the details weve got right now. Some of it has been reported by the Washington Post this morning. The plan aims to cut taxes by more than 5 trillion over ten years. And heres the interesting part. Its going to recoup participant of that. Youll keep the Mortgage Tax Breaks and charitable tax
breaks. But a lot of the tax breaks you have are going to disappear. Might be a good thing. Might be a bad thing. Weve got a lot of tax breaks in this code. We dont see a Border Adjustment Tax we heard about. We dont know about capital gains. Theres still a lot remains to be seen. And in defense of the plan, remember, this is their first swipe at it. Its not the worst plan in the world. The characterization of it as being all about the middle class is a little bit disingenuous. Im going to say its a lot disingenuous. This plan is a win for the rich. Joining us now is john harwood. Whats your take on this . Im going to side with you over ali. Yes you always do. This is a lot disingenuous. In fact, it is not geared toward the middle class. You outlined many of the liabilities of this plan. I should say its also not exactly a plan. Because if you outline a set of races and say we might have another one, were going to pay for tax cuts but arent going to say how, you dont have a plan yet. Theyre beginning a process. This is more detailed than they laid out a couple of months ago, but its still not the entire plan. Among the lieabilities, you mentioned the pass through businesses. Secondly the top rate. Theyre also trimming back on the personal exemptions that families can claim for their dependents. So if you have a large family, if youve got four kids, you might lose more from the loss of those exceptions than you gained from the standard deduction. So theyre going to be Tax Increases at the bottom level of this plan. Can we also point out, i mean, look at history. You can look at the numbers. When the wealthiest people out
there get more money in their pockets, there is not a direct correlation to them going out and spending more. Theres a greater chance that they go out and put more money in the stock market. When people who are living closer to the vest, living paycheck to paycheck actually have more money, they in turn go out and buy a washing machine, go out to dinner, buy clothes. Theyre the ones that change their lifestyle potentially and add inject money into the economy. Stephanie, weve run some recent experiments on this question. Bill clinton raised taxes on the highest earners. The economy boomed after that. Even more than under president reagan. President obama raised taxes on the top earners in the country. Not as much as he wanted to, but some. He grew jobs continuously and the economy improved after that happened. Those arent the only things that happened, but theres not very good evidence to suggest that this is some sort of a magic potion to spur Economic Growth as the administrations been claiming. And it needs to be. Josh earnest is here as well. Josh, let me ask you. It needs to be because if you cut taxes and you dont get the corresponding Economic Growth, then you have what by the way a whole lot of republicans dont like. And that is the point i was going to pick up that john was making. I think its important. We have tested these propositions before. Under bill clinton and barack obama, we cut taxes for the middle class and raised taxes on the highest earners. What was the result . Accelerating in the economy and reduction of deficits. We tested this both ways. When bush tried the opposite thing, we saw the opposite. We know how this plays out. I think the other thing that is really important here, the biggest political story of the day is the political earthquake
in alabama. I dont think anybody was showing up at rallies chanting cut Corporate Taxes. And that is two things. A, they werent looking for that. This just doesnt it has more legitimative appeal than it has appeal to regular people. And evidence indicates that if Corporate America wanted to expand and make more factories right now, theyve got either the cash on hand to do it or the available credit to do it. The idea we repatriate the money no question about that. And to joshs point, if you look at the polling, a majority of people in the country say that taxes should go up on business and should go up on the wealthy. So the republicans are fighting uphill on this question and on that roy moore Victory Last Night despite the endorsement of President Obama for his opponent, steve bannon President Trump john b i think you meant President Trump. I did mean President Trump. Did i say obama . You did. Yeah, i dont think obama endorsed Luther Strange. At that rally last night they warned republicans saying were coming after the fat cats and wall street. Were coming after silicon valley. And so all those republican senators now who are contemplating not only their general election but primary elections have to worry about backing a plan that would cut the top rate. Steve bannon inside the white house talked about raising the rate. John, lets remind the attendees at the rally who put steve bannon on that stage. The mercer family. Cofounder of renaissance, one of the biggest, most complex hedge funds that specializes in Structure Derivatives on the planet. So spare me that nonsense line. And a lot of tax avoidance. Correct. Hold on a second. Lets bring in michael strain. There are a lot of people, fiscal conservatives who have
been working to try and develop a plan that they believe will spur Economic Growth. Michael strain, good to see you. Is your fingerprints on this . And do you believe it achieves the people like you Many American enterprise believe spurs Economic Growth . Well, thank you for having me on. It sounds like you guys are having a lively discussion about this. You know, look. I think this plan reflects ideas that have been around for quite some time. Lower the corporate rate is something that has traditionally had support among both conservatives and liberals, among democrats and republicans. Simplifying the personal side of the code is something that has traditionally had bipartisan support as well. I think, you know, when i look at this plan, the big question for me is how do we pay for this . Thats right. I imagine that will be thats the question. Asked this week as we move forward. So do you believe it pays for itself in the way the president were going to wait for him to say it in indiana. He says it every time. I bet hes going to say it nap this is going to pour such fuel on the economic fire that were going to get 3 he thinks he thinks 6 . Is that true in your opinion . Well, ill take the easy one and say no. This would not increase the Economic Growth rate to 6 . You know lets try 4 or 5 . It will not raise it to 5 either. Look, i mean, i think that you will see Economic Growth effects from increased incentives to work and save and invest. The question again is how does this get paid for. And if we increase the deficit, does that crowd out private investment that restrains growth even if it lower statutory rates
are encouraging growth . Well see what the details of this looks like. From what ive seen so far, i dont think the plan will come close to paying for itself through increases and Economic Growth. But michael i think it will mitigate some of the costs. But youll have to pay in other ways. Pick your industry. Whether its gaming the tax system or regulatory capture. The largest corporations out there always know how to figure out how to game the system. And its smaller business and midsize ones that get squeezed out. Theres nothing here that shows that its tipping the scales for the small guy and not advancing the big guy. Well, i dont know about that. We see a lower corporate rate. We also see a lower rate for pass through businesses. Great. Pass through businesses. Including hedge funds, law firms, the 500 llcs that President Trump has. You are correct that there are some pass through businesses that make a lot of money. There are also pass through businesses that are very new businesses, that are startups, or have been around for some time that dont have huge profit margins. But that are Family Businesses or small shops or businesses that have been around for many, many years. Pointing to the fact that they are often organized as pass through businesses doesnt negate the fact that most businesses are organized as Pass Throughs and that this plan will can i ask quick before we go . We mentioned hedge funds dpop they take carried interest out . I didnt see that in there. Has anybody seen that . No. But ali, could i just ad one thing to what michael was saying . Michael identified that there had been a bipartisan desire to cut the Corporate Tax rate. That is true. President obama, in fact, opened the door to that in his treasury
department talking about a framework for doing that. But they had the condition that it pay for itself. Why . Because the government needs more money, not less. Weve got a huge number tens of millions of baby boomers who are coming onto the Social Security and medicare rolls. We need more government revenue, at least not to lose it. Whats happened with the republican plan so far is they have failed to make the tradeoffs necessary in order to make a Corporate Tax rate paid for by taking away loopholes. If you dont do that, youre just going a cut and expanding the deficit. If i was a corporation, shouldnt i pick the Bernie Sanders single payer option . Because that would be the best for me. That would cost me the least. You know, i dont know about that. Look, there are some pay fors in here. A paid for, for example, of eliminating the deduction for state and local taxes which is a significant deduction. And you get a lot of revenue that way. But i do think the question is, you know, how big is the Deficit Impact going to be. As this plan goes through the process, you know, were not what were getting today is not a detailed plan. Were getting a framework and the question is as that framework gets written into legislative language through the process, are we going to see additional pay fors on the table . I expect we will. But there again, you know, the question is whats the deficit of that going to be . That is the question we all have. We need more detail. It is september 27. We were supposed to have a tax deal passed by the august recess. Now were talking about the end of the year. This is about the most complicated thing people can get their hands around. So i appreciate that you guys are listen. Last point . Last point is just that it wasnt that long ago that donald
trump said i dont think that rich people need a tax cut. Hopefully therell be through the legislative process. That was such an important point, we gave you music. Michael, thanks for joining us at the last minute. And john harwood, thank you. Josh, thank you as well. Next, new details from this morning from the closed door testimony of longtime trump ally roger stone. Were going to speak with the house intel lawmaker that some called Congresswoman Smear. Oh, roger, youre so clever. Also in d. C. , the Washington Post reports the epa spending 25,000 to install a secure soundproof phone booth for administrator scott pruitt. Thats taxpayer money. Hes got to get in there to call tom on the private plane. Velshi rhule continues in a minute. For your heart. Your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. For 100 years, heritage and innovation have made gillette the 1 shave in america. Now get gillette quality at lower prices every day. Brought to you by 1200 workers in boston were proud of giving you our best. Gillette. The best a man can get. But he hasoke up wwork to do. In. So he took aleve. If hed taken tylenol, hed be stopping for more pills right now. Only aleve has the strength to stop tough pain for up to 12 hours with just one pill. Aleve. All day strong. Trump campaign or anyone associated with donald trump. Okay. That was longtime trump confidant karz gnattic fellow, right . Thats a nice way to put it. After his grilling by the House Intelligence Committee yesterday. The typically bombastic operative was relatively subdued after answering questions at the hearing. But he did manage to work in a few trumplike digs on democrats including when he decried the fact that the session was closed citing previous trump advisers experience. In the case of michael caputo, he attended the session, answered all questions truthfully and then Congresswoman Smear i mean spear came back and maligned him. Said he had perjured himself. Im going to let ali take it here because i mispronounced the word decreed. Jackie spear of california, thank you for being with us. Great to be with you. Okay. Lets just talk about that swipe at you. Was that some sense of how roger stone acted Behind Closed Doors in the committee . Well, first of all roger stone is the premier showman. He put on his serious blue suit, showed up at the committee and was subject to the interview and did a very good job, was very serious. No pomp and circumstance. No unfurling of invective. And of course he went out afterwards and went back to the roger stone we know and some love and some boent. But let me just say this. Hes writing a book on how a gentleman should dress. He might want to read a book on how a gentleman should act. Hear hear. Well, there you have it. Besides fashion and manners, whatd you get down to in there . What was most interesting to me was the fact he just comes out, flat out says he doesnt
believe russia was interfering in our election. He doesnt believe the Russia Military intelligence. If you take that position even though you have the entire intelligence community, all 17 agencies saying very specifically with high confidence that that was the case and certainly the intelligence that is classified completely supports that, so if he says that no thats not the case, then he can arguably say, no, i wasnt engaged with the russians. Hes not admitting it was a russian interface. So its convenient for him to make those statements. The question for us, though, is was there involvement with the Trump Campaign and russia . And just as importantly and probably more importantly is how deep do the russians go in terms of impacting our elections . And were finding day by day its more and more. Were finding facebook was one of the weapons and im using the terms weapons intelligencely. One of the weapons they used to try and influence the election and probably much more than that. Let me ask about roger stone talking about why these hearings should have been open. Should