Former Goldman Sachs president Gary Cohn, a 1979 graduate of Gilmour Academy, is leading the effort to craft President Donald Trump’s plan to overhaul taxes that will be released within weeks, a White House official said.
Unnamed congressional leaders have been consulted on the blueprint, the official said. It’s separate from Trump’s proposed budget, the official said, requesting anonymity because the plan is still under development.
During a meeting at the White House with U.S. airline executives Thursday, Trump said he had a “phenomenal” plan to revamp business taxes that would be revealed within the next two or three weeks, without offering details. White House Press Secretary Sean Spicer told reporters later that day that specifics would emerge only in the coming weeks. Still, he said the White House is at work on an outline of the most comprehensive business and individual tax overhaul since 1986.
Cohn, 56, stepped down as Goldman’s president and chief operating officer in December after agreeing to lead Trump’s National Economic Council, an influential panel that helps coordinate and develop the president’s economic program. He was long seen as the heir apparent to the bank’s Chief Executive Officer Lloyd Blankfein.
During a news conference Friday with Japanese Prime Minister Shinzo Abe, Trump said he was working with House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell on the tax measure, which would be guided by an “incentive-based policy” and released “over the next short period of time.”
Congressional leaders weren’t commenting on Trump’s tax plans. Staff members in the offices of Ryan and Ways and Means Chairman Kevin Brady referred questions about it to the White House. A spokesman for McConnell had no immediate comment after a scheduled meeting Friday between the Kentucky Republican and the president.
Trump’s mention of a tax outline on Thursday took House and Senate Republicans by surprise, said Henrietta Treyz, a macroeconomic policy analyst at Height Securities, an investment-research firm. She cited conversations with high-level congressional staff members. “It was news to them; they had no idea it was coming,”she said.
Regardless, GOP leaders in the House broadly expect Trump will support their tax plans, which include a controversial proposal to tax U.S. companies on their domestic sales and imports, while excluding their exports, Treyz said.
Cohn said last week that he has been meeting with members of Congress and working on two key goals: cutting corporate income taxes and individual income taxes. He emphasized during a Feb. 3 interview with Fox Business News that he has been focused on tax cuts for low earners.
“We’re not spending a lot of time with the high earners,” Cohn said during that interview.
During his campaign, Trump adopted a plan favored by House Republican leaders that would consolidate the existing seven individual income-tax rates to just three. The top rate would be reduced from 39.6 percent to 33 percent.
Cohn also said during an interview on CNBC last week that all options for corporate tax reform are being considered, including the plan favored by Ryan that would cut the corporate tax rate to 20 percent and tax U.S. companies on their domestic income and imports, while exempting their exports and offshore income. That so-called “border-adjusted” plan has run into widespread opposition from retailers, oil refiners and other industries. Major exporters, including companies like General Electric Co., have expressed support.
The former banker has also called for using proceeds from a special tax on U.S. companies’ offshore earnings to help fund an ambitious public-works program. Under current U.S. tax law, companies can defer paying income taxes on their offshore profit until they return those earnings to the U.S. As a consequence, U.S. companies have stockpiled an estimated $2.6 trillion in income offshore.
Trump campaigned on a plan to apply a much lower tax rate — 10 percent or less as opposed to 35 percent — to those overseas corporate earnings. Companies would then be free to return that money to America if they wished, and the U.S. Treasury would see a multibillion-dollar infusion.
Some Trump advisers have suggested using receipts from that “repatriation” tax to pay for $137 billion in tax credits for private businesses that invest in public-works improvements. In all, Trump has called for spending as much as $1 trillion to upgrade roads, bridges, airports and other infrastructure.
This story was written by Margaret Talev of Bloomberg.
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