‘Largest tax change since Reagan’
Mnuchin eyes breaks for middle class, businesses
Americans should expect the “largest tax change since Reagan,” with federal tax cuts for average income earners as well as U.S. businesses, President-elect Donald Trump’s nominee for Treasury secretary said Wednesday.
“There will be a tax cut for the middle class,” banker, movie producer and former Goldman Sachs partner Steven Mnuchin told CNBC’s Squawk Box in his first public comments on the incoming administration’s economic priorities. “Any tax cuts that we have for the upper class will be offset by less deductions to pay for it.”
Tax deductions for charitable contributions would still be allowed, he said. There would be a cap on mortgage interest payments, though “some deductibility” would continue, Mnuchin said.
The proposed changes also include cutting the nation’s 35% top business tax rate to 15%, along with an effort to encourage repatriation of the estimated $1 trillion that large U.S. corporations hold in foreign subsidiaries to avoid the domestic tax bite. Trump has proposed a special 10% rate on overseas funds the companies shift back to the U.S.
“We think by cutting corporate taxes we’ll create huge economic growth and we’ll have huge personal income, so the revenues will be offset on the other side,” Mnuchin said in the interview.
The changes should help increase sustained U.S. economic growth, he predicted.
“I think we can absolutely get to sustained 3% to 4% GDP. And that is absolutely critical to the country,” Mnuchin said. “To get there, our No. 1 priority is tax reform. This will be the largest tax change since Reagan.”
The proposals echo some proposals Trump outlined during his campaign. However, the claim that any tax cuts for the wealthy would be offset with fewer reductions appeared to conflict with his formal tax plan. Although Trump said his economic team projected 3.5% GDP growth over the next decade during a September speech at the Economic Club of New York, he also told the gathering, “I think we can do bet-