Amid rising skepticism about the Trump administration's ability to push through one of its highest economic priorities, Treasury Secretary Steven Mnuchin said Thursday that enactment of tax reform and deregulation are essential to achieving the president's target of 3% growth in gross domestic product.
"The president and I fundamentally believe that tax reform is critical to growing the economy and getting back to sustained economic growth," Mnuchin told the Senate Banking Committee in his first hearing since being sworn in as secretary. "It has been more than 30 years since we have had comprehensive tax reform in this country. Combined with often imprudent regulations crafted in the midst of the crisis, the entire American prosperity has slowed. I believe that a goal of 3% GDP, or higher economic growth, is achievable if we make historic reforms to both taxes and regulation."
While campaigning, Trump said his policy plans would lead to GDP growth of 4% a year, but he recently said he'd settle for 3%.
At the same time, Mnuchin was promoting tax reform in the Senate, U.S. CEOS were pushing the idea before tax writers of the House Ways and Means Committee.
The White House issued an outline of its tax plan in April, calling for corporate and pass-through business rates to be cut to 15%. On individuals, today's seven tax brackets would be reduced to three: 10%, 25%, and 35%. The Alternative Minimum Tax would be repealed, but so would a lot of popular deductions.
Such dramatic changes to the tax code would be difficult in any environment, but with Trump's administration increasingly mired in scandals and political distractions, the chances of success seem even smaller.
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