WASHINGTON, D.C. — The Trump administration on Wednesday is expected to release details on what Treasury Secretary Steve Mnuchin called “the biggest tax cut” in US history, according to a White House spokesperson.
The plan is expected to include huge tax cuts for businesses and a significant tax burden reduction for the middle class.
“It’s a great plan,” said the president during a briefing at the White House. “It’s going to put people back to work.”
Speaking at an event sponsored by The Hill on Wednesday, Mnuchin said Trump’s plan would include reducing the current corporate tax rate of 35% down to 15%, a whopping 20% cut.
”What this is not going to be is a loophole to let rich people cash in,” said Mnuchin. “The 15 percent corporate rate was always non-negotiable for the president.”
For the middle class, the proposed plan involves dropping the existing seven income-tax rates to just three and cutting the individual top rate from 39.6% down to 35. The plan also calls for the ending of the a 3.8 % net investment income tax that applies to individuals earning more than $200,000 a year, repealing of the alternative minimum tax and elimination of the estate tax, which currently applies to estates worth more than $5.49 million for individuals and $10.98 million for couples.
On the flip side, the plan would eliminate the federal income-tax deductions that are currently allowed for state and local taxes — a provision which critics say would hit high salary earners in mega-tax states such as New York and New Jersey. Itemized deductions such as home mortgage interest and charitable contributions will still be deductible under the plan, however, and will have little to no impact on the middle class.
Trump’s proposed tax plan comes just three days before his highly touted 100th day in office, which is traditionally used as marker for measuring a new president’s performance.
In a statement on Wednesday, National Economic Council Director Gary Cohn described the proposal as “The most significant tax reform legislation since 1986 and one of the biggest tax cuts in American history.”
When challenged on how the president plans to fund the tax cuts, Cohn said the jobs created by industries who are able to hire more employees as a result of the tax breaks would likely stimulate enough economic growth to cover the cost.