As the 100-day mark approaches, President Donald Trump’s administration hurried to unveil what White House chief economic adviser Gary Cohn described as the “biggest tax cut” in U.S. history.
During the daily White House press briefing Wednesday, Cohn and Treasury Secretary Steve Mnuchin presented the plan to reporters, though they offered very few details about the dramatic proposal. On the campaign trail, then-candidate Trump telegraphed many of the ideas featured in the new tax plan.
The proposal will cut the number of income tax brackets from seven to three, with the top rate being 35 percent, the median rate being 25 percent, and the lowest 10 percent. And in perhaps the most drastic cut, the business tax rate will be slashed from 35 percent to 15 percent.
The White House would also like to see the elimination of all tax deductions except the mortgage and charitable contribution deductions.
“We don’t want to penalize people,” Cohn told reporters. “We want to make the system very fair.”
And as for how the restructured tax system will be "paid for," Mnuchin said lowering taxes for businesses while at the same time closing loopholes and deductions will increase government revenue, though he stopped short of saying it would be “revenue neutral.”
“This will pay for itself with growth,” Mnuchin said, later adding that the president’s plan will bring in “trillions of dollars in additional revenues.”
Cohn said the Trump plan would also eliminate the estate tax, commonly referred to as the “death tax,” immediately. The economic adviser said the change will be particularly helpful to the owners of privately held businesses and farmers, who are often hit the hardest by this requirement.
The White House plan will also feature a “one-time tax” on the trillions of dollars held overseas by corporations. That rate, though, has not yet been determined, Mnuchin said, adding that the Trump administration is “working with the House and Senate” on a repatriation rate that will be “very competitive” and “bring back trillions of dollars.”
As far as personal income taxes, the Trump proposal would virtually eliminate federal income taxes on the first $24,000 earned by a married couple and would nearly double the standard deduction.
All of this, Mnuchin said, is to stimulate the economy.
“The president’s objective is creating economic growth,” the secretary noted.
House Speaker Paul Ryan (R-Wis.) seemed heartened by the proposal.
In a joint statement with Senate Majority Leader Mitch McConnell (R-Ky.), Senate Finance Committee Chairman Orrin Hatch (R-Utah), and House Ways and Means Committee Chairman Kevin Brady (R-Texas), Ryan said the Trump tax plan “will serve as critical guideposts for Congress and the administration as we work together to overhaul the American tax system.”
“We’re confident we can rebuild our tax code in a way that will grow our economy, better promote savings and investment, provide our job creators with a competitive advantage, and bring prosperity to all Americans,” the statement read.
Cohn, who has rarely made public appearances, offered a cheery outlook about the plan, too.
“I would never, ever bet against this president,” he said.