Gary Cohn on Trump tax plan: “Our basic premise here is to simplify the tax system, lower rates and make it easy.” https://t.co/VpAGUrQEUT
— CNN (@CNN) April 26, 2017
On Wednesday morning, Treasury Secretary Steven Mnuchin teased that “the biggest tax cut” in history was on its way. Just a few hours later, the Trump administration unveiled the hyped plan, which was indeed massive, and folks were left with lots of questions regarding how the government plans to pay for the cuts. Highlighted within the proposal is the Trump administration’s call for the standard deduction to be doubled, essentially eliminating tax payments on the first $24,000 a married couple (filing jointly) makes each year. For small businesses, the plan seeks to keep more money in their pockets, which is aimed at fostering job growth.
With President Trump’s First 100 Days about to end, he made it a priority to outline this tax plan, but Wednesday was nothing more than a first step and a glorified broadcast of intentions. A CNN Money report reveals how not everyone sees the plan as a step in the right direction. One senior GOP aide remarked, “It’s not tax reform. Not even close.”
The plan Mnuchin brought to the table on Wednesday was low on specifics and high on percentages. He called for drastic cuts to business tax rates, individual tax rates, and the removal of tax brackets, both things Trump promised to voters in airplane hangers all over the country during his campaign. CNN summarizes:
Lower individual income tax rates: The proposal calls for reducing the number of tax brackets from seven to three for individuals, which would be set at 10%, 25%, and 35%. That’s well below today’s top rates of 28%, 33%, and 39.6%.
During the campaign, he had originally called for those rates to be 10% 20% and 25%. He later amended his plan, calling for somewhat higher rates to match what House Republicans have been calling for: 12%, 25%, and 33%.
Additionally, the tax cut outline includes a one-time tax on overseas profits for companies that don’t go with the “America First” program. This also includes a switch to taxing U.S. companies territorially, to stress how Trump would like to bring production back to the U.S. Mnuchin also says there will be an elimination of most deductions (other than those related to mortgage interest or charitable contributions).
The administration is hyping their tax reform plan as a major plus for small businesses affected by over regulation and high tax payments, saying that the payment of fewer taxes would eventually lead to economic growth and the creation of more jobs. As expected, the tax plan did not include any mention of money being allocated towards the building of a U.S.-Mexico border wall. That’s sure to be a discussion for another day.
TIME‘s Zeke Miller tweeted a copy of the notes for Mnunchin’s portion of the press briefing.