* Trump reaches out to Democratic leaders again
* Congressional Republicans say tax outline due Sept. 25 (Updates with comments from White House official, Schumer and Pelosi)
By Steve Holland and David Morgan
WASHINGTON, Sept 13 (Reuters) - President Donald Trump said on Wednesday that taxes on rich Americans might rise, as he pursues a tax code overhaul and reaches out to both Democrats and Republicans in a push to win support for a plan still far from complete.
Trump met with the two top congressional Democrats over dinner at the White House in a search for common ground that could make it easier to get a tax-cut package through Congress.
Both sides said the meeting, which covered an array of legislative issues, was productive.
Earlier, Treasury Secretary Steven Mnuchin said tax reductions would be paid for by faster economic growth.
The White House and the Republican-led Congress have yet to put forth a detailed tax plan, despite months of high-level talks that had until recent days excluded Democrats.
House of Representatives Speaker Paul Ryan said an outline of a plan would be unveiled during the work week beginning Sept. 25, with congressional tax-writing committees crafting detailed legislation in the subsequent weeks.
Mnuchin told Fox News Channel the Trump administration would use its own economic assumptions to gauge the impact of its tax cuts on the federal budget deficit and the $20 trillion national debt, a key issue in Washington's intensifying tax debate.
"It will be revenue neutral under our growth assumptions," Mnuchin said. "So, we can pay for these tax cuts with economic growth."
The administration believes tax cuts will lead to much faster growth than do congressional analysts or most private forecasters, a likely fault line in the debate ahead.
As for taxing the rich, Trump said during a meeting with a bipartisan group of lawmakers - his second in as many days - that the wealthy "will not be gaining at all with this plan. ... If they have to go higher, they'll go higher, frankly."
In a phone call with a small group of reporters, Marc Short, Trump's legislative affairs director, said the president was not talking about higher tax rates, but that other changes in the tax code could affect the wealthy and how much they pay, the publication Roll Call reported.
TAXING THE RICH
Democrats have criticized Republican tax overhaul efforts as benefiting mainly the wealthiest Americans and corporations.
Tax experts said Trump could raise taxes on high-income people by lowering the cap on mortgages eligible for interest deductions to $500,000 from $1 million. Another step might be to close a loophole that lets Wall Street fund managers pay low taxes on much of their income, analysts said.
Trump might also propose eliminating the deduction for state and local taxes, then use the revenue raised to fund tax cuts for the middle class, leaving top earners with a higher effective tax bill. There has also been talk in the Senate about increasing tax rates on capital gains and dividends.
But even with those changes, analysts said it was not clear top earners would end up paying more overall, partly because Trump has also proposed cutting the top individual tax rate.
Steven Rosenthal, a senior fellow at the nonpartisan Tax Policy Center think tank in Washington, said Trump was unlikely to raise taxes on investment income.
Instead, he said, Trump could close a loophole that largely benefits super-rich financiers, although they may be able to find other ways to avoid taxes.
"That's what I would expect him to do, take a symbolic but ineffective step," Rosenthal said.
DINNER WITH 'CHUCK AND NANCY'
Trump hosted Senate Democratic leader Chuck Schumer and House Democratic leader Nancy Pelosi on Wednesday evening to discuss tax overhaul plans and other legislative items.
A White House official said the meeting was constructive and covered border security and the status of so-called Dreamers who came to the United States illegally as children, as well as infrastructure and trade, in addition to taxes.
"The administration looks forward to continuing these conversations with leadership on both sides of the aisle," the official said.
In a joint statement, Schumer and Pelosi called the meeting "very productive" and said it focused mainly on the plight of the "Dreamers," nearly 800,000 young immigrants who are able to live and work in the United States legally under the Obama-era DACA program that Trump recently rescinded.
"We agreed to enshrine the protections of DACA into law quickly, and to work out a package of border security, excluding the wall, that's acceptable to both sides," they said. One of Trump's major campaign promises was building a wall the entire length of the U.S.-Mexican border.
In his meeting earlier on Wednesday with eight Democratic and five Republican House members, Trump had expressed hope he could bring a fresh bipartisanship to Washington.
Asked what his message was to skeptical conservatives who worry he is cozying up to Democrats, Trump said: "I'm a conservative, and I will tell you I'm not skeptical. And I think that if we can do things in a bipartisan manner, that'll be great. Now it might not work out."
Trump blindsided Republican leaders last week by striking a deal with Schumer and Pelosi on the U.S. debt limit and federal spending for three months.
Ryan said the outline being worked on now would reflect the consensus of the House Ways and Means Committee, the Senate Finance Committee and the Trump administration.
"I would love to have the Democrats supporting and working with us in a constructive way on tax reform, but we're going to do it no matter what," Ryan said.
There has been no comprehensive U.S. tax code overhaul since 1986, and starkly different visions embraced by the two parties for how to move forward promise to make the task difficult.
Asked about Trump's comment on a possible tax increase for the wealthy, House Ways and Means Chairman Kevin Brady said: "My goal is to lower taxes on every American as much as possible and help them keep more of what they earn." (Reporting by Steve Holland and David Morgan in Washington; Additional reporting by Susan Cornwell, Roberta Rampton, Makini Brice, Richard Cowan, David Morgan and Susan Heavey in Washington; Writing by Will Dunham and Tim Ahmann; Editing by Kevin Drawbaugh and Peter Cooney)
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