Trump admin considers tax increase for rich to pay for no tax on tips

The Trump administration could raise the tax rate for the wealthiest Americans in an effort to eliminate taxes on tips

According to a report in Axios, administration officials believe it would help them fulfill a campaign promise

while dampening criticism from Democrats as they try to extend President Trump's 2017 tax cuts and jobs act

Technically, the administration wouldn't need to raise the rate. They would just need to let the portion of the tax law expire, which it does at the end of this year

Republicans are currently working on a budget reconciliation package to extend the tax law

but it's projected to decrease the federal government's revenue and in turn increased debt

So letting taxes increase on the wealthiest Americans could offset other provisions like eliminating taxes on tips

The current highest tax rate is 37% for individuals making more than $609,000 a year or couples making more than $731,000

If the Trump tax cuts are not extended, the top rate would, jump to 39.6 percent and the bracket income level would drop to 418,000 for individuals

and 470 for couples Democrats say Republicans are only extending the tax cuts to help their wealthiest donors If they let the highest rate increase they could prevent some of those criticisms As one administration official said if we renew tax cuts for the rich paid for by throwing people off Medicaid we going to get slaughtered

Eliminating taxes on tips isn't the only tax code change being considered

Republicans also want to eliminate taxes on social security benefits and military retirement benefits

Senator Pete Ricketts just announced a bill that would do both. He pointed out that from 1935 until 1983, Social Security benefits were not taxed

By 1993, 85% of the payments were taxable. These aren't government handouts

There are benefits people have earned. Seniors have paid in at Social Security for decades

Veterans have given years of service to protect our freedoms. We should not be double-taxing them

Congressional Republicans hope to have the budget reconciliation. package finished by April 7th. Currently, they do not agree on how to get it done and what to include

Based on the significant changes they want to make, that timeline will be extraordinarily difficult

I'm Ray Bogan for Straight Arrow News. For more reporting, download the SAN app