Trump Won’t Accept Corporate Tax Rate of More Than 20%: Mnuchin
U.S. President Donald Trump has drawn a line in the sand on corporate taxes, according to Treasury Secretary Steven Mnuchin. In an interview with The Wall Street Journal, Mnuchin said 20% as the absolute highest the Trump administration was willing to go on corporate taxes.
“It’s not going up,” he told the WSJ CEO Council event on Monday. “I can tell you this is one of the things the president feels very strongly about.”
Tax Debate Rages On
The Republican party remains at odds over how to overhaul the tax code, with key Senate members diverging from the previous plan advanced through a House committee earlier. Although both plans call for a reduction of the corporate tax rate to 20% from 35%, the Senate proposal would delay the reduction until 2019. It would also remove the entire state and local deduction and do away with a repeal of the estate tax, WSJ reports.
Analysts say the Senate bill would free up hundreds of billions of dollars, thereby softening the blow of a major funding shortfall. Mnuchin maintains that any lost revenue would be made up through stronger economic growth. Tax experts are divided as to whether growth alone could make up for a multi-trillion-dollar shortfall.
When asked about bitcoin, Mnuchin said digital currencies need to be evaluated “more carefully” before warning that this medium is being used for illegal transactions. The Treasury Secretary said last week he was looking “very carefully” at cryptocurrency, although no timeline for issuing an official position was given.
The world’s largest economy appears to have turned a corner in the last six months, with GDP expanding at its fastest rate in more than two years. Recent economic indicators ranging from employment to retail sales have been largely positive, signaling continued momentum in the final stretch of 2017.
President Trump has vowed to grow the economy at least 3% annually, and is using corporate tax cuts as a way to make it happen. The president has yet to unveil other pro-growth initiatives, such as infrastructure spending and deregulation, but analysts say these are likely to materialize next year.
Investors can anticipate a steady stream of economic data throughout the week to shed light on the health of the U.S. economy. On Tuesday, the Labor Department will issue its latest producer inflation report. The latest prints on consumer inflation and retail sales will be issued on Wednesday, followed by industrial production and housing data in the latter half of the week.
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