US Treasury secretary warns on tax cut
US Treasury secretary Steven Mnuchin said the stock market will probably see its gains wiped out if politicians fail to deliver planned tax cuts that will benefit corporate America.
“To the extent we get the tax deal done, the stock market will go up higher,” Mr Mnuchin said in an interview on the Politico Money podcast
“But there is no question in my mind if we don’t get it done you are going to see a reversal of a significant amount of these gains.”
US stocks have been hitting record highs, buoyed by strong economic data and, according to Mr Mnuchin, investor optimism that the Trump administration’s planned tax cuts and regulatory relief will move forward.
“I think it’s priced in, in anticipation, so I don’t think it’s priced in 100% certainty,” said Mr Mnuchin.
“So I think the market will go up.”
Treasury secretaries typically avoid predictions about markets to avoid disrupting them.
Mr Mnuchin also gave his “absolute guarantee” that the tax bill will be ready for the presidential signature by early December to be completed by the end of this year.
In the interview, Mr Mnuchin also shed light on his reading habits: The Treasury secretary gets phone notifications when his boss, President Donald Trump, posts on Twitter, which is one of the first things he checks after waking up.
These days briefing books are about the only texts on his nightstand, though Mr Mnuchin said he loves learning about people and their history and he devours biographies, including that of first US Treasury secretary Alexander Hamilton.
The government and independent analysts have repeatedly warned about the risks facing the economy should Mr Trump succeed in cutting US corporate taxes.
Much of the plan, however, remains vague but after months of high-level talks among Trump aides and top Republicans in Congress, his administration unveiled in September proposals for a 20% corporate income tax rate — down from 35% currently; a new 25% tax rate for pass-through businesses, including partnerships; and a reduced 35% top income tax rate for individual Americans.
Details also remain vague on a tax amnesty, with plans to tax accumulated profits estimated at $2.6 trillion (€2.2tn) held by US firms abroad.
Analysts said that the tax plans could pose a challenge to foreign direct investment flowing into Ireland, in particular from the huge investments made here by drugs firms.
Bloomberg and
Irish Examiner staff
