Treasury Secretary Steven Mnuchin has rejected any plans to pay for tax cuts for middle-income earners by introducing higher taxes on top earners.
The Trump administration plans to release its full proposals by September of this year and have it approved by Congress by the end of 2017. Under the congressional, proposed tax cuts can be passed with a simple majority. This means that the Republican party can pass the law without any Democratic votes.
“Our plan is to have a full-blown release of the plan in the beginning of September, with being able to vote and getting this passed before the end of the year,” said Mnuchin.
“We’re finalising the details of the plan, so there are certain issues that are still on the table.” he added.
When questioned about tax cuts for middle-class earners, which was an idea proposed by White House advisor Steve Bannon, Mnuchin said: “I have never heard Steve mention that. It’s very clear, kind of, we have a proposal out there that the administration has put out, with a top rate of 35 percent where we reduce and eliminate almost every single deduction.”
“We’ve heard a lot of feedback from New York, California, New Jersey, Connecticut, Illinois, and I think we want to be sensitive to those states and those economies as we shape the plan,” he said.
“We probably met with 300 or 400 different business leaders, outsiders, think tanks,” he added.
The administration’s plan is to reduce the amount of tax paid by earners in the top bracket from 39.6 percent to 35 percent, whilst also lowering tax rates for the middle class.
According to a report by Axios, the idea will boost the top rate above 40 percent for people who earn $420,000 a year or above.
So far, a one-page summary of broad principles for tax reform has been released, but there are few details.