By: Zack Duvall
Treasury Secretary Steven Mnuchin made several appearances on news programs this past weekend to discuss the White House’s first budget proposal and the President’s tax plan ahead of President Trump’s first address to Congress Tuesday night. An address in which many, including an impatient Wall Street, expect to see the President give details regarding his plans for reforming the tax code and making good on campaign promises to cut taxes for U.S. businesses and grow the economy.
Mnuchin also took the time to assure viewers, as well as skeptics, that the administration had no plans to cut social programs millions of Americans rely on such as Medicare and Social Security.
“We are not touching those now. So don’t expect to see that as part of his budget. We are fully focused on other aspects and that’s very important to us.” Mnuchin told viewers of the Fox News Channel program “Sunday Morning Features”.
The comments from Treasury Secretary Mnuchin appear to support promises made by the President during the campaign that he would implement sweeping tax reform measures and do so without cutting any “entitlement” programs.
Mnuchin went on to talk about how the President will outline some of his tax plan in his address to Congress Tuesday. Mnuchin said the proposed tax plan was going to cut the number of tax brackets and that the plan will also “create a level playing field for U.S. companies to be able to compete with the world.”
Mnuchin also hinted at the possibility that the White House was looking into what is known as a “reciprocal tax” which would put in place a tax on goods imported from certain countries. The White House claims the tax would create more trade parity with other countries. President Trump has said numerous times such a tax is necessary in countries that charge value-added taxes on imports, but exclude their own country’s exports from taxation.
When asked about a Congressional Republican proposed twenty percent “border adjustment” tax, the President had recently went on the record to say he was looking into, Mnuchin said the administration was “still very carefully” studying the potential impact such a tax would have. Proponents of the tax say that it would raise over $1 trillion to in part fund other tax cuts to help grow the economy and create jobs.
“There are certain aspects that the President likes about the concept of a border tax, there are certain aspects that he is very concerned about.” Mnuchin said about the White House’s stance on the tax.
Mnuchin went on to say that White House and Treasury Department officials were looking forward to working with Congress and Congressional leaders to develop plan the drew bi-partisan support and helped to re-build American business and manufacturing.
Critics of the details released so far about the President’s proposed tax plan claim that projected estimates and figures by the administration are over exaggerated, citing the fact that the Trump administration, as Mnuchin fully admitted during the interviews, “fully believes in dynamic scoring”. A form of calculating a proposed tax plan’s impact that is rooted in the belief that lowering the tax burden greatly boosts revenues by encouraging economic activity. The Congressional Budget Office has always previously used the “static” scoring method, that assumes very conservative economic effects of tax and budget changes.
Despite critics of the proposed tax plan, business and Wall Street executives are anxiously awaiting the official plan from White House Officials.