White House: $4,000 more for families with business tax cuts

WASHINGTON (AP) — By slashing corporate tax rates, the Trump administration said today, the average U.S. household will get an estimated $4,000 more a year.

This stunning 5 percent increase was met with skepticism from tax experts and Democratic lawmakers who said the math was flawed. Spread across every U.S. household, the White House analysis claims it would generate "conservatively" an income jump totaling $504 billion, or about $200 billion more than the revenues currently generated by the corporate income tax.

With this new report, the White House is making a populist argument for its proposal to cut the 35 percent corporate tax rate to 20 percent.

The president has pitched his tax plan as supporting the middle class even though the details point to major companies and the wealthy as the biggest winners. Polls suggest voters generally frown upon the idea of cutting taxes for businesses – essentially rewarding these firms for avoiding taxes by exploiting loopholes and keeping profits overseas.

"President Trump complains about fake news – this fake math is as bad as any of the so-called fake news he has complained about," said Senate Minority Leader Chuck Schumer, a New York Democrat. "This deliberate manipulation of numbers and facts could lead to messing up the good economy the president inherited."

The analysis by Kevin Hassett, chairman of the White House Council of Economic Advisers, said the considerably lower rate would spur more investment by companies, which would then boost hiring and worker productivity.

The average income gains from the reduced rate would range from $4,000 to as high as $9,000, the administration said. Those figures, however, rely on research arguing that workers – rather than investors – would primarily benefit from the lower corporate rates.