Having just returned from the G20 meeting in Germany, Treasury Secretary Steven Mnuchin said on the Sunday broadcast of “This Week” that the Trump administration will release its tax plan in early September, in the expectation of a vote on Congress by the end of this year. According to the Axios website, White House strategist Steve Bannon advocates a proposal to raise the highest tax bracket to 40 percent or above in order to pay for tax cuts on middle-class Americans. "I've never heard Steve mention that," Mnuchin told ABC’s George Stephanopoulos. “It’s another example of a false leak that’s been reported,” he said. “It’s not on the table.”
Mnuchin said, “We’re absolutely committed to getting tax reform done this year.” He said, “It’s critical for economic growth. We need to get back to 3% or better GDP.”
Mnuchin said the plan has not changed since the unveiling of the proposal in April, which includes streamlining the current seven tax brackets to three -- 10%, 25% and 35% -- while the top rate would fall from 39.6%. Officials have not said which income ranges would apply to those brackets.
Delays are expected to push tax reform to the end of the year. Revenue to offset tax reductions will depend on the Republicans and their proposed replacement of the Affordable Care Act. Senate Republicans are also proposed to a proposed border adjustment tax that could offset the revenue losses from tax reform.
According to Mnuchin, President Trump’s “focus is on a middle-income tax cut” and “reforming the business tax system to make it competitive.” Mnuchin said that reductions in federal revenue will be offset by eliminating deductions. Eliminating state and local tax deductions would strike high-tax states, California, Connecticut, and New York especially hard. “We want to be sensitive to the states and those economies as we shape the plan,” Mnuchin told Stephanopoulos.
Mnuchin said he expects that federal revenue will grow when tax cuts kick in.