Trump to announce 'massive' tax cut for Americans this week

US President Donald Trump ordered the Treasury to find ways to cut taxes and Dodd-Frank rules.

WASHINGTON • President Donald Trump has promised that he would unveil a "massive" tax cut for Americans this 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.

Mr Trump offered his tax tease in an interview and again during remarks at the Treasury Departmentlast Friday afternoon as he raced to stack up legislative accomplishments before his 100th day in office at the end of next week.

He told the Associated Press in an interview that he would release a tax package next week that would include reductions "bigger, I believe, than any tax cut ever". He provided no specifics but said he would outline his plan on "Wednesday or shortly thereafter".

His announcement surprised Capitol Hill and left Mr 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.

Earlier in the day, when reporters asked Treasury Secretary Steven Mnuchin how far away a tax overhaul proposal was, he said he could not give an answer. "Tax reform is way too complicated," he said.

Starting that fight next week is further complicated by Mr Trump's hopes to revive the Republican healthcare plan that collapsed last month. And it would mean attempting a tax overhaul as his White House faces the prospect of a government shutdown if lawmakers cannot agree on a funding bill by April 28.

The details of Mr Trump's tax plans remain the subject of intense speculation, with stock markets regularly gyrating when White House officials discuss the subject. Since taking office, the president has suggested that he wants to enact the deepest cuts to individual and corporate tax rates in history.

But despite Mr Trump's statement that his tax overhaul "really formally begins on Wednesday", White House officials quickly cautioned against high expectations that Mr Trump would provide the legislative text of a detailed tax plan this week. Instead, a senior administration official said the President would only release the "parameters" that Mr Trump expected a tax plan to follow in the long congressional debate that surely would follow. Another official said the information released would be more like a "broad" outline.

Wall Street, which tends to celebrate tax cuts, barely reacted - the Standard & Poor's 500-stock index was down 0.3 per cent on Friday.

The administration has maintained that middle-income tax cuts, a simplification of personal income taxes, and making business taxes more competitive with other countries are the top priorities.

Mr Trump insisted that his plans were on track and that his strategy to remake the economy would change history.

Despite Mr Trump's enthusiasm, the directives he signed at the Treasury Department on Friday were largely preliminary. As business groups cheered the moves, some sceptics were left questioning whether Trump was keeping his campaign promises to give working-class Americans a higher priority than Wall Street bankers.

"From our perspective, it is a direction that is dramatically backwards on financial stability," said executive director of Americans for Financial Reform Lisa Donner.

The presidential order asks Mr Mnuchin to review the tax regulations imposed by President Barack Obama last year. Those include efforts to clamp down on "corporate inversions" - in which US 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 Mr Trump's campaign pledge to reduce incentives for companies to move overseas to minimise taxes.


A version of this article appeared in the print edition of The Sunday Times on April 23, 2017, with the headline 'Trump to announce 'massive' tax cut for Americans this week'. Subscribe