Trump surprises staff with vow of ‘massive’ tax cut for Americans
WASHINGTON — President Donald Trump promised on Friday that he would unveil a “massive” tax cut for Americans next week, vowing a “big announcement on Wednesday,” but he revealed no details about what is certain to be an enormously complicated effort to overhaul the nation’s tax code.
Trump offered his tax tease during remarks at the Treasury Department on Friday as he raced to stack up legislative accomplishments before his 100th day in office at the end of next week.
His announcement surprised Capitol Hill and left Trump’s own Treasury officials speechless as he arrived at the Treasury offices to sign directives to roll back Obama-era tax rules and financial regulations.
Trump told the Associated Press that his tax reductions would be “bigger, I believe, than any tax cut ever.” But he faces an enormous fight among clashing vested interests as Congress tries to rewrite the tax code.
Despite Trump’s enthusiasm, the directives he signed at the Treasury Department on Friday to review measures put in place by the Obama administration were largely preliminary. As business groups cheered the moves, some skeptics were questioning whether Trump was keeping his promises to give working-class Americans a higher priority than Wall Street bankers.
The presidential order asks Treasury Secretary Steven Mnuchin to review the tax regulations imposed by President Barack Obama in 2016. Those include efforts to clamp down on “corporate inversions” — in which U.S. companies merge with foreign companies to take advantage of lower tax rates abroad. Viewed alone, undoing the rules would appear to be at odds with Trump’s campaign pledge to reduce incentives for companies to move overseas to minimize taxes.
Robert Willens, an independent tax consultant, said reversing these rules would be a gift to Wall Street bankers and lawyers who have complained that they have hampered international deal making.
Memorandums to the executive order ask Mnuchin to review the Orderly Liquidation Authority, a tool created by the Dodd-Frank law of 2010 for unwinding financial institutions that are on the verge of collapse. Many banks have hoped that Congress will repeal the system. The administration is examining whether it encourages excessive risk-taking or exposes taxpayers to potential liabilities.
Treasury is also reviewing the Financial Stability Oversight Council, which designates financial institutions as “systemically important,” better known as “too big to fail.” It requires them to hold more capital in reserve in the event of financial emergencies.