Donald Trump revealed he plans to announce major tax cuts by the end of April – but most commentators believe his announcement must delay any talk of border taxes.
In an interview published on April 21, Trump said his teams’s plans will be released on “Wednesday [April 26] or shortly thereafter.” He added that the plan if passed into law) will result in tax cuts for both individuals and businesses. Though he would not provide details of the plan, he claimed his the tax cuts will be “bigger I believe than any tax cut ever.”
Treasury Secretary Steven Mnuchin had initially set a goal of getting tax reform passed by August, but that deadline has slipped. Mnuchin has recently said the administration still hoped to get a bill passed well before the end of the year.
Border taxes seemed unlikely to be included in the package. Bloomberg reported that:
“the tax plan next week likely won’t include a border-adjusted tax that House Speaker Paul Ryan has proposed, a senior administration official said. The White House is still debating the idea, according to the official. Trump will release a tax plan for individuals and businesses next week that may not include every component that will go into final legislation, according to a different senior White House official.”
Opposition to border taxes, both within Trump’s team and from many US businesses, makes it look almost impossible to get a plan including them through Congress this year.
After delivering almost none of his 28 promised achievements in his first hundred days in office (his hundredth day is April 29), Trump appears more concerned with getting tax reductions approved relatively quickly than with achieving his import-reduction objectives.
The problem with a tax-reduction plan that does not include border taxes is that it can be funded only if US economic growth more than doubles. If growth remains slow, major tax reductions would have the effect of increasig the government’s deficit