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Trump close to releasing tax overhaul plan

20 Apr 2017 20:50 (+01:00 GMT)
Trump close to releasing tax overhaul plan

Washington, 20 April (Argus) — President Donald Trump's administration will unveil plans for a comprehensive tax overhaul "very soon" and aims to enact changes this year, US treasury secretary Steven Mnuchin said today.

The release of Trump's plan could jump-start discussions with Congress about how to structure the first major tax policy update in 30 years. The tax debate so far has centered around a white paper US House speaker Paul Ryan (R-Wisconsin) released in June 2016. But the White House has yet to clearly weigh in on contested aspects of that plan such as a border adjustment tax, creating uncertainty about the plan's viability.

Trump has missed earlier targets for releasing the tax plan. The White House on 9 February said the tax plan was coming within three weeks but an actual plan never materialized.

Mnuchin did not say definitively whether the forthcoming tax plan would endorse a border adjustment tax, which would prevent corporations from taking tax deductions on imports and eliminate duties on exports. But he outlined an aggressive schedule for moving tax legislation just days after conceding an earlier plan to pass tax legislation by August was not realistic.

"Just to be clear, we hope this will not take until the end of the year," Mnuchin said at an event the Institute of International Finance held in Washington, DC. "So we are very focused on it, big priority for the president."

White House officials are indicating support in the upcoming tax debate for dynamic scoring, a legislative approach that assumes tax cuts will cause enough economic growth to make up for lost tax revenue. This would make it easier for Republicans to pass a tax bill without any Democratic support.

"Using dynamic scoring may allow us to get to a permanent solution, but again we have to do what we need to do to drive job creation and the economy," White House National Economic Council director Gary Cohn said today at the event.

Cohn said the eventual tax plan would likely focus on "reciprocity" with respect to the tax treatment of imports. Trump has argued that if a country charges taxes on US exports, the US should adopt similar taxes on products imported from the same country.