Mnuchin: Trump's tax plan is a 'middle-income tax cut'

Cheryl Sanders
April 27, 2017

The Trump White House unveiled a plan to cut personal and corporate taxes, simplify income brackets and eliminate certain deductions yesterday, but openly acknowledged their ideas will face tough pushback from Democrats and Republicans alike. "As the president (Donald Trump) said during the campaign, we will lower the business rate to 15 per cent; we will make it a territorial system; we will have a one-time tax on overseas profits, which will bring back trillions of dollars that are offshore to be invested here in the United States, to purchase capital and to create jobs", Mnuchin said. "Trump's tax plan would make that system worse".

The centerpiece of the tax plan would be a drastic cut from the business tax rate, from the current rate of 35 to 15 percent, which would apply to small businesses, corporations and large owner-operated conglomerates, like Trump's real estate empire.

Under the proposed plan, the corporate tax rate would drop from 35 percent to 15 percent.

The inheritance tax, easily one of the most controversial and most fought-over of taxes will "disappear immediately" under President Donald Trump's tax plan, national economic director Gary Cohn told Newsmax on Wednesday afternoon. However, if more people chose to work less a tax cut could potentially lead to lower growth.

A proposal to eliminate the estate tax should also be scuttled. Cutting the top individual tax rate and setting the top rate for partnerships and other so-called "pass-through" businesses would also benefit high-income taxpayers. Cohn said Trump is still concerned about the debt but the adviser reiterated his view that the tax cuts would advance the economy.

But the long-anticipated overhaul - details of which remained unclear beyond a handful of headline measures - could face stiff opposition in Congress, including from some Republicans, with lawmakers sharply divided over the prospect of fueling already-rising deficits.

"This isn't going to be easy", Cohn said. We'll be attacked from the left and we'll attacked from the right.

Still, "I would never, ever bet against this president".

Mnuchin added, "We are determined to move this as fast as possible, to get this done this year".

Mr. Mnuchin also said he hoped the plan would win Democratic support.

A key element is a one-time tax on overseas profits, which Mnuchin said will "bring back trillions of dollars that are offshore to be invested here in the United States".

That rate has yet to be finalized.

More lower-income Americans would pay no tax at all, and there would be relief - still undefined - for families with child care expenses.

"They went into some suggestions that are mere suggestions and we'll go from there", said Hatch, who chairs the powerful Senate Finance Committee. Without greater detail from the White House, that's impossible to verify.

"It's not the federal government's job to be subsidizing the states", said Treasury Secretary Steve Mnuchin.

In the absence of long-range reforms to entitlement spending, even a revenue-neutral tax proposal won't head off the growing deficits that will drag down future economic performance.

"The only result of this plan will be a steep increase in our country's deficit while leaving working- and middle-class families in the dust", House Democrat Gwen Moore fumed in a statement.

No border adjustment tax as proposed: Trump is not expected to back a controversial provision known as the border adjustment tax that was proposed by House Republicans.

"The claim that his multitrillion-dollar tax cut will pay for itself is as incredible as the claim that Mexico will pay for his multibillion-dollar border wall", said Representative Lloyd Doggett, the leading Democrat on the House Ways and Means Tax Policy subcommittee. Mnuchin says the administration wants to accelerate it above 3 percent, a pace it hasn't touched since 2005. "It's tons of jobs".

Mnuchin said the expectation is that the corporate and individual tax cuts will boost USA economic growth to 3 percent annually, up from last year's tepid 1.6 percent advance.

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