Calling it the “biggest tax cut in U.S. history” President Donald Trump wanted to make a huge splash when his administration announced his much anticipated tax plan yesterday, but the announcement may have created more questions than answers as it sent a slight ripple through Wall Street. Stocks finished slightly down across the board Wednesday following comments by U.S. Treasury Secretary Steve Mnunchin that the Trump administration wants to move “as fast as we can” with the tax overhaul proposal, but provided few details. See more below courtesy of CNBC.
Mnunchin had prioritized a goal of passing a tax reform plan by this August, but since then the White House has pulled-back from that deadline. If passed, the Trump plan would be the first tax reform since 1986. Some of the questions surrounding the latest offer had to do with how it would be funded. A memo from the administration states that “a one time tax on trillions of dollars held overseas would be levied on accounts.” However, Treas. Sec. Mnuchin said the rate for that tax has yet to be determined. Mnuchin said the White House is “working with the House and Senate on a repatriation rate”, saying it would be “very competitive.” President Trump is hoping to drastically reduce corporate taxes, and insists that the tax cuts will pay for themselves with hastened economic growth across the U.S.
Treasury Secretary Steve Mnuchin told ABC News today that he couldn’t say how Pres. Trump’s tax overhaul plan would personally affect the President, and he also refused to guarantee that middle-class families wouldn’t pay more under the Trump proposal.
See video from ABC’s Good Morning America below.
The White House has provided a “fact sheet” on the Trump tax plan proposal which includes:
- Reducing the number of income tax brackets from seven to three, with a top rate of 35% and lower rates of 25% and 10%. It is not clear what income ranges will fall under those brackets. It would also double the standard deduction.
- The proposal will cut the corporate tax rate from 35% to 15%.
- The plan would eliminate tax deductions, with only a few exceptions, including the mortgage interest and charitable contribution deductions.
- The plan would eliminate the estate tax, otherwise known as the “death tax” which affects only a very small portion of Americans.
- The U.S. would go to a “territorial” tax system, that typically excludes most or all of the income that businesses earn overseas.
- The plan would also repeal the alternative minimum tax and 3.8% Obamacare taxes.
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