Trump Tax Cut: Take One
Trump’s tax plan would be a big deficit-financed fiscal stimulus if enacted, though it is still too early to speculate on the details or compromises that might emerge in what is finally legislated. Here are our initial thoughts.
Just under the wire to fall within the symbolic first 100 days, the Trump administration has released a “statement of principles” to guide discussions and negotiations around tax reform. There is extremely little in the way of new details beyond the headline 15% corporate tax rate that was mooted earlier. But from the few specifics we have, the plan may be somewhat less vulnerable to attack as a tax cut for the rich than previous suggestions. For instance, the top rate on individuals would be 35% — not 33% as had been suggested — with the other two brackets at 25% and 10%.1
1 Bloomberg, “Trump’s ‘Massive’ Tax Plan: One Page, Many Unanswered Questions” by John Voskuhl, April 26, 2017.