Stephen Moore — a fellow at the Heritage Foundation who played a key role in developing President Trump’s tax proposals in 2016 — said Tuesday that he’s pitched several tax plan ideas for the president’s reelection campaign, including consolidating the number of tax brackets from seven “to potentially three or four.”
Moore told The Hill on Tuesday that one idea he’s proposed would reduce the middle-income tax rate to as low as 15 percent.
{mosads}Moore also said he’s proposed to the White House providing more tax-free savings accounts that would be targeted to the middle class.
Additionally, Moore said he’s floated an idea that would allow people not to have to pay capital gains taxes if they sell an investment and then use the money to buy a new stock.
Moore’s ideas come as Trump is expected to offer a new tax package ahead of the 2020 election. The proposal would be deeply unlikely to pass the Democratic-controlled House, but Trump would be able to talk it up as he seeks to contrast himself with Democrats.
“It would be more of a campaign plan,” Moore said.
Trump enacted a tax-cut law in 2017 that failed to become popular despite widespread support from Republicans. While the law cut taxes across all income groups, polls show voter view it as mainly beneficial to the wealthy and corporations.
Democratic presidential candidates are campaigning on rolling back the 2017 package, expanding refundable tax credits that benefit low- and middle-income families and raising taxes on the rich.
Moore said that the White House right now is in the process of collecting ideas for a new tax package. He noted that National Economic Council Director Larry Kudlow likes the idea of consolidating tax brackets, and that such an idea was part of the 2016 campaign plan that Moore and Kudlow worked on.
The Washington Post first reported that economic advisers to Trump are looking a 15-percent tax rate.
The current seven tax brackets range from 12 percent to 37 percent. The IRS recently announced that, for 2020, the 22-percent bracket would apply for income from about $40,000 to about $86,000 for a single filer.
Tax-policy experts have said that cutting the middle tax brackets could end up being expensive and providing a tax cut to the wealthy in addition to the middle class.
Kudlow declined to comment to the Post about what specific tax ideas the administration is considering, and said the process of developing a plan is in the early stages.
“[Trump] wants to afford as much relief and simplicity as possible for middle-income taxpayers,” Kudlow told the Post.
Trump previously floated a middle class tax cut in the weeks before the 2018 midterm elections. But he never offered specifics, his advisers and top Republicans said they were unfamiliar with the idea, and the White House never put forward any formal proposal.