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Updated 7 hours ago
Treasury Secretary Steven Mnuchin on Thursday laid out an ambitious schedule to enact tax relief for the middle class and businesses by August, but he said the Trump administration is still studying a proposed new border tax on imports.
Comments suggested that much work is needed on key elements of the sweeping tax reform plan that he called his “No. 1 priority.”
“We are committed to pass tax reform. It will be very significant. It's going to be focused on middle-income tax cuts, simplification and making the business tax competitive with the rest of the world,” Mnuchin said.
“We want to get this done by the August recess,” he added, acknowledging that such a timeline is “very aggressive.”
U.S. equities have risen to record highs in recent weeks on hopes tax reform and other Trump administration policies would boost growth, but investors have started to become impatient for details.
President Trump has promised announcement of a “phenomenal” plan by early March to cut business taxes.
The dollar fell against a basket of major currencies, while yields on Treasury bonds slipped after Mnuchin failed to provide much new information on the tax plans. U.S. stocks were mixed.
Some Republican senators have criticized a House Republican plan to levy a 20 percent tax on imports aimed at encouraging more U.S. production and exports and raising $1 trillion in revenue over a decade to offset lower business tax rates.
Mnuchin said the border tax plan is being studied, but the tax reform plan would be negotiated with the House and Senate.
“We're looking at it seriously. There are certain aspects of it that we're concerned about; there are certain aspects that we like,” Mnuchin said of the border tax adjustment plan. “It's going to be something that's focused on growth, and we will have listened to people's concerns, and we will have taken them into account.”
Mnuchin did not rule out potential tax cuts for wealthy earners but said the administration would aim to offset any “high-end” tax cuts with reduced deductions and other breaks.
He said that he believed the tax reform plan would help the United States boost economic growth above 3 percent by late 2018, from 1.6 percent in 2016. Growth effects from tax reform and less business regulation would not likely start to take hold until next year, he added.
He said the Trump administration would use “dynamic scoring” models that would likely assume more growth than models used by the Congressional Budget Office and the Joint Committee on Taxation. This would have the effect of boosting assumed revenues from tax reform and relaxation of regulations.
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