Trump tax plan may produce some short-term budget issues: Mnuchin
- Author: Zachary Reyes Apr 25, 2017,
Apr 25, 2017, 16:12
The White House will release the "broad principles and priorities" of their plans to overhaul federal taxes on Wednesday, a White House official said Friday night, downplaying expectations that the Trump administration would reveal key details underpinning the plan. An analysis that doesn't factor in economic growth forecasts is called a "static" assessment. The concept was popularized as "trickle-down" economics. Experts throw cold water on that idea, since there is no evidence that tax cuts pay for themselves.
Mulvaney said the tax plan the White House will release Wednesday will include "some specific governing principals, some guidance, also some indication of what the rates are going to be".
President Donald Trump is planning to pitch cutting corporate tax rates from their current rate of 35% to 15%, the Wall Street Journal reported Monday, and has directed staff to draft a plan for doing so.
"It is an honor to stand with President Trump and Secretary Mnuchin today as we begin the process of reforming our complex tax code and streamlining the financial regulatory process", said Rep. Claudia Tenney.
But it's very fair to assume the cost of reducing the corporate tax rate will be high.
The meeting is scheduled to take place in the office of Senate Majority Leader Mitch McConnell, R-Ky.
US President Donald Trump will make an important announcement about his awaited plan for tax reform next Wednesday. The aide, who spoke on condition of anonymity, was not authorized to speak publicly about the issue.
A White House spokeswoman didn't immediately respond to a request for comment from The Post. The NYT says those include efforts to clamp down on "corporate inversions" - in which American companies merge with foreign companies to take advantage of lower tax rates outside the United States (including some territories that offer lower corporate tax rates lower than those proposed in any Republican tax cut plan).
"I don't think we've decided that part yet", Mulvaney told Fox News on Sunday.
Trump has pledged that the tax cut in total would be the largest in USA history, and his advisers have said that the economic growth it stimulates would make up for any shortfall in revenue.
Mnuchin declined to give further details. And even members of the GOP who agree that tax cuts can significantly boost growth have acknowledged that any big tax cut would require raising other revenue or finding budget savings. Had that spending cut been achieved, the Trump Administration could possibly have pushed tax cuts through without the need to ask Congress to raise America's debt ceiling. Major tax cuts might also provide a short-term boost, but they would likely produce additional debt that would dampen growth in the future.
"If you get rid of OLA without a realistic mechanism to liquidate a [mega bank] then you're setting yourself on the road to taxpayer bailouts", said Marcus Stanley, policy director for Americans for Financial Reform, a group that supported the passage of Dodd Frank. If you would like to discuss another topic, look for a relevant article.