Conservative tax group Americans for Tax Reform is coming out hard against the idea of inserting a marginal tax increase for the highest earners into their extension of the 2017 Trump tax cuts, which cut the top income tax rate to 37 from 39.6 percent.
“Keeping the top rate at 37 percent is a red-line,” John Kartch, the group’s vice president, wrote in a social media post over the weekend.
He argued that increasing the top tax rate would negatively affect businesses since many are structured as “pass-through” entities, which pass their tax bills directly onto their owners.
“Most pass-through business income is taxed at the top rates, so raising these rates would harm Main Street businesses engaged in just about every aspect of the economy,” he wrote in a Monday editorial.
Group president Grover Norquist told The Hill that increasing some rates while dropping others was a bad strategy for Republicans.
“Somebody comes in and says, ‘I’ve got a brilliant idea. Let’s be the tax increasing party.’ That’s what kept Republicans in the minority until 1994,” he said.
In ascending order of brackets, the 2017 cuts took marginal rates down from 15 to 12 percent, from 25 to 22 percent, 28 to 24 percent, 33 to 32 percent, and from 39.6 percent to 37 percent. The 10 percent rate for lower earners was left in place as was the 35 percent rate for some higher earners.
— Tobias Burns
