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US tax overhaul seen this year
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US tax overhaul seen this year

WASHINGTON: The Trump administration expects to complete an overhaul of the US tax code by the end of the year, Treasury Secretary Steven Mnuchin said Thursday. His remarks came a day after President Donald Trump began a road trip to rally ordinary members of the public behind the proposal, even though the White House so far has released scant details. The White House initially said it expected to complete the tax overhaul by this month, part of Trump’s pledge to return the world’s largest economy to annual growth of as much as four percent. But his growth agenda has stalled in Congress as he has alienated members of his own party, who now face bruising battles over raising the government’s borrowing authority, adopting a budget and approving reconstruction aid in the aftermath of Hurricane Harvey. “I think we talked about originally our goal had been August,” Mnuchin said in an interview with CNBC. “Unfortunately, things got delayed a bit but we’re on a track to get this done by the end of the year.”

Mnuchin said details of the tax overhaul would be released within the month. Trump called for cutting the official corporate tax rate to 15 percent, a 20-point reduction, which Mnuchin said was the level considered “ideal” by the White House. But asked whether that was realistic, Mnuchin said, “Wherever we end up, the objective is to get a competitive business rate.” Proponents of cutting US corporate taxes say the official rate of 35 percent is among the highest in the world and makes the US uncompetitive. However, researchers have found US companies in practice pay a much smaller share in taxes due to exemptions and credits. Mnuchin repeated his confidence that Congress will raise the government debt ceiling when it comes back in session next week after the August recess, before Washington faces a debt default.

Treasury still expects the United States to run out of funds by September 29 after hitting a statutory limit on borrowing in March, he said. The non-partisan Congressional Budget Office estimates the drop-dead date could fall in mid-October. However, Mnuchin said, the cost of responding to the devastation from Hurricane Harvey could exhaust government finances earlier than expected. “I think there could be some impact of a couple of days,” but “We’re having discussions with the Republicans and the Democrats and I’m very confident we’ll get this raised.” He said it is too early to determine the economic impact of the storm.