President Donald Trump's Treasury secretary Steve Mnuchin prepares for "biggest tax cut" for US ever

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President Trump Meets with Treasury Secretary Mnuchin at Treasury Department
Steven Mnuchin is Donald Trump's Treasury secretary (Source: Getty)

US Treasury secretary Steve Mnuchin has confirmed Donald Trump's tax plan will aim for the biggest tax cut in the country's history.

Speaking at an event in Washington Mnuchin said: "This is going to be the biggest tax cut and the largest tax reform in the history of our country and we are committed to seeing this through."

The Wall Street Journal has reported Trump ordered aides to create a plan cutting corporate tax to 15 per cent, even if it means a big fall in government revenues.

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Trump promised in a campaign document to introduce a "Middle Class Tax Relief and Simplification Act" within his first 100 days. However, US media reports suggest the plan, to be announced later today, will fall short of providing enough detail for a bill.

As well as rushing to present a tax plan, the President is also involved in negotiations over passing a budget for the federal government to avoid it shutting down on Saturday, his 100th day.

A 15 per cent rate, down from the current 35 per cent, would represent a massive tax cut which would delight US businesses.

However, a cut on that scale would also entail the US budget deficit ballooning if not accompanied by major spending cuts. A rise in the deficit would likely enrage conservatives and set up another showdown with the right of Trump's Republican party.

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Republican politicians have put forward a plan which would make up for the fall in revenue by levying a so-called border adjustments tax on imports. The border adjustment would effectively penalise importers and give a big boost to American exporters.

However, Mnuchin said the border adjustments plan would not work, according to CNBC. He said the White House doesn't "think it works in its current form, and we're going to continue to have discussions with them about revisions."

Mnuchin attempted to emphasise the unity of legislators, despite figures as influential as speaker of the House of Representatives Paul Ryan calling for a revenue-neutral plan.

The Treasury secretary said: "The House, the Senate, the administration are all on the same page that tax reform is a major priority to boost the economy."

The tax cut will be accompanied by tax reform in an effort to make the labyrinthine US tax system easier to navigate.

Mnuchin said: "We want to make business competitive and we want to simplify the personal tax system, lower taxes and create economic growth."

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