By Alex Daugherty
McClatchy Washington Bureau
WWR Article Summary (tl;dr) The tax plan which was unveiled today includes a 15 percent corporate tax rate, a 20 percentage-point drop from the current rate, along with the elimination of all tax deductions except for mortgage interest and charitable giving.
The White House announced a broad tax overhaul plan on Wednesday that would dramatically cut taxes for corporations, but it did not explain how the government would pay for the massive tax reductions.
Treasury Secretary Steven Mnuchin and chief economic adviser Gary Cohn billed Wednesday’s announcement as a starting point for potential legislation and repeatedly said President Donald Trump’s administration would work with Congress before coming up with a more specific plan.
“We are in constant dialogue with the House and Senate,” Mnuchin said. “We have a broad-brush view of where we are going to be, and we will be back to you with very firm details.”
The plan includes a 15 percent corporate tax rate, a 20 percentage-point drop from the current rate, along with the elimination of all tax deductions except for mortgage interest and charitable giving. Cohn and Mnuchin also said the estate tax, known by detractors as the “death tax,” would be immediately repealed.
There would be three tax brackets for personal income, 10, 25 and 35 percent, instead of the current seven.
“This isn’t going to be easy; big things never are,” Cohn said. “We’re going to be attacked from the left and from the right.”
The attacks from the right include criticism of a controversial tax on imported goods known as a border adjustment tax, which Trump has mentioned in the past but which multiple Republicans have described as a nonstarter in negotiations because it would hurt retailers.
House Speaker Paul Ryan, R-Wis., is an advocate of the border adjustment tax. He argues that it would help make a tax overhaul revenue neutral and would encourage companies to create American products and jobs.