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Corporate Tax Relief Coming via “Lightening Fast” Proposals

Treasury Secretary says reform could come by August, though for some companies the devil may be in the details.

GettyImages-582304608-compressorCEOs eagerly awaiting details of Donald Trump’s tax agenda are expected to get some Tuesday, when the president delivers a policy address to Congress.

In the meantime, his Treasury Secretary and former Goldman Sachs partner Steve Mnuchin has tempered fears that meaningful reform could take at least another year to materialize.

“We need some more time to get tax reform done and we’re doing it under lightening-fast proposals,” he told Fox News on Sunday. “So for us to get this done by August, which we anticipate we’ll do, it’s going to be really fast.”

“I can assure you that when we come out with the plan—and this is going to be a joint plan—it is something that is going to be simple, that companies will know how to incorporate.

Republicans have prioritized using their majority in both houses of Congress to repeal the Affordable Care Act, though it’s not yet clear when and how they’ll find consensus on how to proceed.

BlackRock CEO Larry Fink is among market commentators who have questioned whether Trump’s tax plans will come to fruition this year, given the potential for differences in opinion among Republicans on healthcare, tax and other matters.

One possible bone of contention is the border adjustment tax, which, although currently championed by House Republicans, has driven a wedge between exporters and importers in the CEO community.

“This is something we’re studying very carefully,” Mnuchin said. “There are certain aspects that the president likes about the concept of a border adjusted tax. There are certain aspects that he’s very concerned about.”

Whatever the outcome, Mnuchin said the White House will propose a “combined plan that takes the best of all of this when we bring it forward.”

His comments came after Hewlett-Packard CEO Meg Whitman waded into the debate by questioning Trump’s view that a border tax would create more jobs in America.

“The border adjustment tax is not good for companies that have a relatively low margin with a supply chain that is outside the United States,” Whitman said. “Everything that is in our products comes from overseas. And by the way, that supply chain has taken 30 years to set up. So when all those components come in and are taxed, it’s not going to be good.”

Many American products exported overseas are comprised of raw materials and components that are imported. Still, the border tax proposal has found support from many large exporters, including Boeing, GE and Pfizer.

“I can assure you that when we come out with the plan—and this is going to be a joint plan—it is something that is going to be simple, that companies will know how to incorporate,” Mnuchin said. “And we also would have had lots of feedback from different industries. We’re going to make sure this works.”

About Ross Kelly

Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.