Financials Jump as Trump and Co. Share Tax Reform Framework
Financials led markets on Wednesday as the Trump administration laid out the case for tax reform.
In a nine-page framework document, President Donald Trump and the GOP outlined plans to reform the tax code. Among the goals, Republicans aim to downsize individual tax brackets into three from seven -- 12%, 25% and 35% -- with income thresholds to be decided. The current lowest bracket is 10%, but lawmakers argued that the increase will be countered by almost doubling the standard deduction to $12,000 for individuals and $24,000 for families.
The Big Six -- a group of officials from the White House and Capitol Hill -- also proposes reducing the corporate tax rate to 20% and a 25% tax rate for certain pass-through entities.
Trump will lay out the plan in a speech in Indiana on Wednesday afternoon. Trump had pushed for a corporate tax rate as low as 15% as late as Sunday.
The Big Six group includes Treasury Secretary Steven Mnuchin, House Speaker Paul Ryan, and Senate Majority Leader Mitch McConnell. Commerce Secretary Wilbur Ross told CNBC on Tuesday that if done right, tax reform could bump up U.S. GDP by 1%, creating "$10 trillion more GDP, $3 trillion more revenues to the federal government" over the next 10 years or so.
Wells Fargo & Co. (WFC) - Get Report , Bank of America Corp. (BAC) - Get Report , Citigroup Inc. (C) - Get Report and JPMorgan Chase & Co. (JPM) - Get Report were all higher on Wednesday. The Financial Select Sector SPDR ETF (XLF) - Get Report increased 1%.
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