The Trump administration is poised to unveil its long-awaited tax reform plan Wednesday that will slash corporate taxes to 15 percent, in the "biggest tax cut" in US history.
Columbia: The Trump administration is poised to unveil its long-awaited tax reform plan Wednesday that will slash corporate taxes to 15 percent, in the "biggest tax cut" in US history.
However, the plan could face hurdles in Congress, including from some Republicans, as lawmakers are sharply divided over the prospect of fueling already rising deficits.
"This is going to be the biggest tax cut and the largest tax reform in the history of our country," US Treasury Secretary Steven Mnuchin said at a discussion about the proposal.
Mnuchin will outline details of the tax plan at the White House later Wednesday, but confirmed press reports that "the business tax is going to be 15 percent."
He said the administration hopes to push the reform through Congress as quickly as possible although he declined to set a deadline.
Earlier this year he said the administration hoped to have tax reform completed before Congress went into its August recess, but that ambition fell by the wayside amid failed efforts to repeal the Obama-era healthcare plan.
"We`re working hard to get it done quickly," Mnuchin said. "This is part of his big impact for the first 100 days."
"We have fundamental agreement on what we`re trying to do and the details of tax reform are still to be worked out."
However, the tax plan`s impact the deficit and debt will be key to the chances of winning support in Congress.
Analysts have said cutting the top marginal corporate tax rate by 20 percentage points could add $2 trillion or more to the deficit over a decade.
The administration has said tax cuts will spur growth which will bring in tax revenues to make up the difference -- a calculation known as "dynamic scoring" which the Trump administration supports.
"The difference between 1.6 percent, 1.8 percent GDP and three percent is staggering," Mnuchin said, referring to the administration`s goal for US economic growth. "It`s trillions of dollars of revenues. It`s tons of jobs."
But economists say this growth effect is not supported by evidence from prior tax cut efforts.Economist Douglas Holtz-Eakin, former head of the non-partisan Congressional Budget Office who served in previous Republican administrations, said dynamic scoring is wishful thinking.
"There has never been any single credible analysis of dynamic scoring that suggests that taxes pay for themselves," Holtz-Eakin told AFP.
The tax cuts could be limited to a 10-year period, but Mnuchin said that would be less than ideal.
"If we have them for 10 years, that is better than nothing," he said. "But we`d like to have permanency to it."
Mnuchin said the lower corporate rate is aimed at helping small businesses, not the wealthy.
"What this is not going to be is a loophole to let rich people who should be paying higher rates pay 15 percent."
Mnuchin also said the administration plans to simplify the process by which Americans declare their income and pay taxes.
"For most Americans, we think they should be able to do their taxes on a large postcard," he said at the event, which was hosted by the newspaper The Hill.
Meanwhile, the federal government could be forced to shutdown Friday night if lawmakers fail to approve new legislation to allow spending to continue in the absence of a complete budget.