The White House has announced that President Donald J. Trump of the United States will start an ambitious tax reform within next few weeks. The public message sent the dollar and the stock market shooting up. The prospect of tax rates being cut enthused investors. In his meeting with a number of airline executives in the White House, Trump however declined to provide details. He said that the plan is proceeding ahead of schedule. He also said that there would be an announcement within the next few weeks.
Although both the Republicans and the Democrats agree on the urgency of tax reform, the work has not progressed due to the complex code. It does not help that a large number of loopholes are also present.
Sean Spicer, the spokesman of the White House later informed reporters that the President would set a highly detailed tax plan. This plan will be inclusive for tax cuts. The latter will be available for individuals and businesses as well.
The rise of the US dollar along with stocks and bond yields took place despite the possibility of disagreements by Congress. As per American law, the tax code can only be changed by Congress. The last time the code went substantial changes was in 1986. The House of Representatives must initiate tax legislation. Kevin Brady, the Chairman of House Ways and Means Committee, and a Texas Republican who had talked to the President concerning the tax reform bill, expressed positive opinions regarding the remarks made by Trump. He told the media that things are proceeding much better.
Promises and Actions
President Trump, during his 2016 presidential election campaign, pledged to voters that if elected, he will slash the business tax rate in the United States from the present 35 percent to the region of 15 percent. Investors have waited for the actual realization of such promises. Prior to the comment made by Trump, this reform the tax pledge seemed to lost momentum in the annals of Congress.
Both House Republicans and the White House have engaged in discussions concerning tax reforms that include the border adjustment proposal. This measure has been widely condemned by retailers, automakers and oil refiners. They are afraid that the import tax of 20 percent may raise the consumer prices. Even Republicans are against such a tax. David Perdue, a Republican Senator from Georgia, termed the border adjustment an extremely bad idea. He urged his GOP compatriots not to support such a proposal.