Donald Trump promised his Twitter followers on Saturday that he would be sharing a "big announcement" on Wednesday. The announcement was intended to address one of his fundamental campaign issues: tax reform. Treasury Secretary Steven Mnuchin even went as far as saying that it would be "the biggest tax cut and largest tax reform in the history of this country" in an interview with The Hill. Now that he has announced it, here's what to expect in Trump's big tax plan.
According to a White House summary, Trump has proposed to repeal estate tax along with alternative minimum tax, which Trump vowed to abolish. In addition to this, his announcement included tax relief for middle-income households, along with help for those shouldering childcare costs. According to Bloomberg, income tax brackets would be reduced from seven to three: 10 percent, 25 percent, and 35 percent.
Corporate tax rate would be slashed down to 15 percent (a promise Trump made during his presidential campaign). This is a provision which small enterprises would also be eligible for. Itemized deductions would be taken out, except for charity-based contributions and mortgage interest. Companies that have parked their earnings abroad would face a one-time special tax. America would enter a "territorial" tax system, which absolves foreign revenue earned by American businesses of taxation.
Big TAX REFORM AND TAX REDUCTION will be announced next Wednesday.— Donald J. Trump (@realDonaldTrump) April 22, 2017
In February, Trump informed airline executives, "We're going to be announcing something I would say over the next two or three weeks that will be phenomenal in terms of tax." Press secretary Sean Spicer also told reporters "a comprehensive plan, something we haven't seen since 1986" was on its way.
Prior to officially announcing his plan, a voice to contradict Trump's Twitter declaration came from the director of the White House Office of Management and Budget, Mick Mulvaney, who told Fox News Sunday, "I think what you're going to see on Wednesday is some specific governing principles [and] some guidance." He went on to say, "I don't think you're going to see something and I don't think anybody expects us to rollout bill language on Wednesday. In fact, we don't want to do that."
In spite of the differences between Trump and House Republicans on the subjects of border-adjustment tax and corporate tax rate, there is general approval from Republicans on his move to implement a territorial tax system.
As far as Trump's own taxes are concerned, Mnuchin informed the press that the president does not plan to release his own taxes, citing that he has already revealed enough information.