More details emerge on Trump’s plan to slash taxes
Donald Trump’s presidential campaign needed better tax analysts.
That was the suggestion made by Steven Mnuchin, Donald Trump’s nominee for Treasury Secretary, at his confirmation hearing before the Senate Finance Committee on Thursday. When asked about the tax plan Trump published last fall—which third-party analysts said would add more than $7 trillion to the national debt—Mnuchin said somewhat apologetically, “We had a rather modest campaign staff. I look forward to having access to all the people at Treasury able to model these things.”
Now that Trump and his top advisers have to fill in the blanks on broad plans released during the campaign, some important new details are emerging.
Mnuchin, for instance, said at his hearing, “We want to make sure tax reform doesn’t increase the size of the deficit.” That’s a sharper distinction than Trump drew during the campaign, and it suggests there could be stricter limits on how much Trump will be able to cut taxes than the incoming president has acknowledged up until now.
Mnuchin did add that he believes the Trump tax plan, whenever it arrives, should be evaluated based on “dynamic scoring,” a controversial method that would lower the presumed cost of tax cuts to the Treasury. Such a dynamic model would account for stronger economic growth due to the stimulative nature of tax cuts, which in turn would produce more economic activity and, in theory, more tax revenue. A static model, by contrast, would simply account for revenue lost to tax cuts, without an allowance for faster growth. So on paper, tax cuts analyzed with dynamic scoring seemingly cost less. Yet even with dynamic scoring, Trump may have to scale back his tax-cut plan if he really intends not to add to the deficit.
Mnuchin also provided a bit more clarity on the “border taxes” Trump has been tweeting about, saying Trump has no plan to institute across-the-board tax cuts on imports. Instead, those taxes would be levied only on specific companies that move jobs out of the United States and import products back into the country. “He’s referred to a small number of companies moving jobs and putting products back into the United States,” Mnuchin said. “In no way has he contemplated a broad 35% border tax.”
Like Wilbur Ross, Trump’s nominee for Commerce Secretary, Mnuchin outlined plans to revamp trade deals with Mexico and China that sound less draconian than what has come out of Trump’s own mouth. With regard to the North American Free Trade Agreement, which Trump faults for killing American jobs, Mnuchin said, “I’m optimistic we can renegotiate that deal in a way that is advantageous for us and advantageous for Mexico, and is a win-win for both countries.”
As expected, Democratic senators hammered Mnuchin over his leadership of OneWest, a California lender formed from the wreckage of the failed IndyMac bank, which Mnuchin and a group of investors bought in 2009. Between 2009 and 2015, OneWest processed roughly 36,000 foreclosures, virtually all of them inherited from IndyMac. Mnuchin apologized for mistakes that led to some inappropriate foreclosures and said OneWest had compensated people treated unfairly. He largely survived the Democratic pummeling and seems like to be confirmed as Trump’s Treasury Secretary.
https://www.yahoo.com/finance/news/more-details-emerge-on-trumps-plan-to-slash-taxes-230439515.html