The Republican tax plan would provide relief for families and small businesses, a group of Orange County business leaders told Treasury Secretary Steven Mnuchin and presidential daughter and advisor Ivanka Trump during a roundtable Monday in Newport Beach.
“We call this the Tax Cuts and Jobs Act. It’s as much about jobs and wage growth as it is tax cuts,” Mnuchin told about 75 people gathered for the discussion in the Newport Center offices of money manager David Bahnsen.
Republicans tout their wide-ranging tax plan as lowering corporate taxes from 35% to 20%, condensing seven tax brackets into four, roughly doubling the standard deduction for individuals and married couples, scrapping the estate tax and easing the tax burden on the middle class with features such as an expanded child tax credit and simplified postcard filing.
It also features a potential repeal of the federal deduction for state and local taxes — although some congressional Republicans are walking that back — and dropping the cap on the mortgage interest deduction on newly issued loans from $1 million to $500,000. President Trump has said he wants tax reform passed by year’s end.
Critics have panned the plan as unfairly tilting toward business and the wealthy.
Ivanka Trump said the plan would streamline the tax code, democratize benefits and support economic growth. The child tax credit would expand from $1,000 to $1,600 per child for married couples earning up to $230,000.
“Something that I feel very strongly about, and the administration is deeply committed to, is ensuring that hard-working Americans have more of their hard-earned money in their pockets at the time when they need it the most, and that’s often when they’re raising children or they’re caring for adult dependents,” she said.
Mostly, she and Mnuchin listened Monday.
Loreen Gilbert, a Laguna Beach resident and founder of Irvine-based WealthWise Financial Services and a member of the Trump Pence Small Business Advisory Council, said: “There are 30 million small-business owners in the United States. Those 30 million small-business owners helped us get out of the recession, and now it’s time to help them grow their companies through reduction in taxation.”
Carolyn Cavecche, president and chief executive of the Orange County Taxpayers Assn. and a former mayor of Orange, rattled off a list of figures about California taxes: highest sales tax in the nation; highest top rate in the nation for personal income taxes; highest corporate income tax in the West; second to Pennsylvania in gas tax, but highest with cap and trade.
“California taxpayers really need this plan,” Cavecche said. “We’re hoping that it will lift us up and support us. But at the very least, we’re looking for it to not do any harm.”
She said she would like to bump the proposed cap on the mortgage interest deduction on new loans from the proposed $500,000 to $750,000, taking into account Orange County’s high housing costs.
Mnuchin, a former California resident, said he’s sensitive to the state’s issues.
“I never thought I could live anywhere that had a higher tax than New York City,” he said. “We’ve spent a lot of time (in) New York, New Jersey, California and others making sure we understand the impact.”
Mario Rodriguez, chairman of the San Clemente-based Hispanic 100 political action committee, said Latinos are statistically the most entrepreneurial group in America, so lower corporate taxes would be a win for them as a group and America as a whole. The higher child tax credit also would ease burdens for Latino families, which are generally middle-income and lower, he said.
“With Latino-owned businesses being the fastest-growing business sector in the U.S., this would be a huge boon for the economy,” Rodriguez said.
Mary Ann Brown, an executive vice president at Newport Beach-based Pacific Life Insurance Co., said she personally would be hurt by the proposed plan. But she said she doesn’t expect any sympathy.
“I just think it’s such a great thing for the economy, so even though I’ll have to pay 10% more taxes because of losing this big California [state tax] deduction, I am very supportive of what you’re doing,” she said.