President-elect Donald Trump’s nascent administration on Wednesday began outlining the contours of its strategy for jump-starting the nation’s economy, including how it would overhaul the tax code, rethink trade agreements and directly negotiate with major corporations.
From Washington Post
Treasury secretary nominee Steven Mnuchin rejected claims that Trump’s tax program would benefit mainly the wealthy, instead highlighting plans for a child-care tax credit and a middle-class tax cut.
“There will be no absolute tax cut for the upper class,” he said on CNBC. “There will be a big tax cut for the middle class.”
Trump’s strategy secured an early victory this week when the president-elect persuaded air-conditioning manufacturer Carrier not to move up to 1,000 jobs from Indiana to Mexico. The negotiation was an unusual move for a modern president, but Mnuchin suggested such direct intervention would be an important tool under the new administration.
“It starts with an attitude of this administration,” Mnuchin said Wednesday on CNBC. “This president, this vice president-elect is going to have open communications with business leaders.”
Mnuchin and Trump’s pick for commerce secretary, Wilbur Ross, also called for moving away from the broad multinational free trade agreements that have shaped the global economy over the past generation in favor of bilateral deals. But they stopped short of embracing the president-elect’s most heated election rhetoric, calling for double-digit tariffs on imports from China and Mexico.
Turning Trump’s sweeping campaign promises into reality could prove a daunting challenge for his newly named economics team, which includes Todd Ricketts, co-owner of the Chicago Cubs, as deputy commerce secretary. Trump’s proposals are both expansive and aggressive, starting with a pledge to create 25 million jobs and push growth to 4 percent annually.
Many economists have questioned whether that is even possible in the face of an aging workforce and slower growth in productivity. In addition, rewriting the tax code would be a mammoth undertaking that has eluded Republican lawmakers since the 1980s, and independent analysts cast doubt on whether Trump can make the numbers add up.
On Wednesday, Trump’s new economic team said that overhauling taxes — particularly cutting the corporate tax rate — would create incentives for businesses to invest and hire more workers, eventually resulting in higher tax revenue. But an analysis by the independent Tax Foundation estimated that Trump’s plan would cost at least $2.6 trillion over the next decade, even after accounting for stronger growth.
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