Treasury Secretary Steven Mnuchin confirmed the administration will propose a corporate tax rate reduction to 15 percent and said lawmakers broadly agree on the need for a tax overhaul, citing a “very successful meeting” on Tuesday evening in Washington.
Treasury Secretary Steven Mnuchin confirmed the administration will propose a corporate tax rate reduction to 15 percent and said lawmakers broadly agree on the need for a tax overhaul, citing a “very successful meeting” on Tuesday evening in Washington. The administration wants to implement the biggest tax cuts and reform in U.S. history as part of a drive to boost economic growth to 3 percent, Mnuchin said. Business tax relief is aimed at small firms and it’s not supposed to provide loopholes for the rich, he said. “It’s clear that the House, the Senate, the administration are all on the same page: that tax reform is a major priority to boost the economy,” Mnuchin said. “We have a very uncompetitive system that’s hindering the economy and jobs.”
Mnuchin declined to comment on any specifics of the tax plan during the event in Washington on Wednesday morning, which had been scheduled weeks before Trump promised to announce details on reforms the same day — an announcement that took Treasury officials by surprise. Mnuchin and White House economic adviser Gary Cohn will unveil principles of the tax plan during a 1:30 p.m. televised briefing at the White House on Wednesday.
“This is gonna be the biggest tax cut and the largest tax reform in the history of our country and we are committed to seeing this through,” Mnuchin said.
Mnuchin and Cohn briefed Republican leaders in the House and Senate Tuesday evening on the Trump tax plan, which includes a corporate rate cut from 35 percent and a call for consideration of a child-care tax credit, a senior administration official said. Trump isn’t likely to endorse a border-adjusted tax, the official said.
House Speaker Paul Ryan supports a BAT, which would replace the 35 percent corporate income tax rate with a 20 percent rate applied to companies’ domestic sales and imported goods, while exempting their exports. Mnuchin said the White House doesn’t support the BAT proposal in its current form, but it’s open to changes. “We’ll continue to have discussions with them on revisions we can consider,” he said.
While the tax proposal will probably inflict a short-term hit to revenue, the administration plans to cover the gap by boosting economic growth over the next decade. To get the tax plan approved, Trump will need the support of some lawmakers from his Republican party who want taxes to be revenue-neutral to avoid swelling the budget deficit.
Trump learned a harsh lesson in how to work with Congress after he failed in an initial attempt to repeal Obamacare, a pledge Republicans have campaigned on for years — much like they have promised to revamp the tax code. As a candidate, Trump portrayed his tax plans as more of a bargaining position than a policy prescription, saying last May: “When I’m negotiating with the Democrats, I’m putting in a plan” and “it’s going to be negotiated.”
Mnuchin suggested this is the approach the administration is adopting for a win in Congress with tax reform. “We don’t start out for what the model is, we start out with what we think should be passed. I’m hopeful that Democrats will work with us on this,” he said. “As you know, there are multiple ways of doing this and the president is determined that we will have tax reform.”