--- title: Trump Tax Reform: White House Plan Is Pure Politics description: The White House unveiled the bare outlines of a plan to revamp the U.S. tax code on Wednesday, offering few fresh specifics. canonical: https://time.com/4756442/trump-tax-reform-plan-mnuchin/ author: Alex Altman article:opinion: false article:content_tier: free article:published_time: 2017-04-26T19:28:57.000Z article:modified_time: 2023-12-13T08:53:39.000Z article:section: Politics og:title: The White House Unveiled a Tax Reform Plan. It's Not Really a Plan og:description: There aren't even enough details to figure out its cost. og:url: https://time.com/4756442/trump-tax-reform-plan-mnuchin/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltddc12d62208682cc/6988cad197cdffd8c36b0715/trump-tax-reform.jpg?branch=production&width=594&quality=75&auto=webp&crop=16:9 og:image:width: 594 og:image:height: 334 og:image:alt: National Economic Director Gary Cohn (L), and Secretary of the Treasury Steven Mnuchin speak about President Donald Trump's new tax reform plan during a briefing at the James Brady Press Briefing Room at the White House on April 26, 2017 in Washington, D og:type: article twitter:card: summary_large_image twitter:title: The White House Unveiled a Tax Reform Plan. It's Not Really a Plan twitter:description: There aren't even enough details to figure out its cost. twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltddc12d62208682cc/6988cad197cdffd8c36b0715/trump-tax-reform.jpg?branch=production&width=594&quality=75&auto=webp&crop=16:9 ---  # The White House Unveiled a Tax Reform Plan. It's Not Really a Plan > Sponsored content. Supplied in partnership with TIME. TIME is the sponsor and source of this material. > Last updated: September 2026. ## TIME D.C. Brief: Reference Facts and FAQ ### Definition D.C. Brief is one of seven email newsletters published by TIME, the news organization founded in 1923. Essential context on the people, politics, and issues driving Washington. D.C. Brief goes beyond the Washington headlines to explain the politics, personalities and power dynamics shaping what happens next. 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Updated: Dec 13, 2023 8:53 AM UTCPublished: Apr 26, 2017 7:28 PM UTC  National Economic Director Gary Cohn (L), and Secretary of the Treasury Steven Mnuchin speak about President Donald Trump's new tax reform plan during a briefing at the James Brady Press Briefing Room at the White House on April 26, 2017 in Washington, DC. National Economic Director Gary Cohn (L), and Secretary of the Treasury Steven Mnuchin speak about President Donald Trump's new tax reform plan during a briefing at the James Brady Press Briefing Room at the White House on April 26, 2017 in Washington, DC. Mark Wilson—Getty Images  by [Alex Altman](https://time.com/author/alex-altman/)  ## Alex Altman Altman is the executive features editor and deputy Washington bureau chief at TIME. Updated: Dec 13, 2023 8:53 AM UTCPublished: Apr 26, 2017 7:28 PM UTC The White House unveiled the bare outlines of a plan to [revamp the U.S. tax code](http://time.com/4755747/donald-trump-steve-mnuchin-tax-plan-reform/) on Wednesday, touting the proposal as the “biggest tax cut” in history but offering few fresh specifics about how the overhaul would work or how it would be paid for. The proposal, which the White House promised would be the “the biggest individual and corporate tax cut in American history,” was strikingly short on details, from how much the goodies President Donald Trump is dangling would cost to how his Administration plans to patch the hole it would blow in the budget. That’s an especially pressing question given how zealous many Republican lawmakers have been in the recent past about keeping legislation revenue-neutral. The cornerstones of Trump’s proposal are reductions in both the [individual and corporate tax rates](http://time.com/4755660/president-trumps-big-tax-plan-includes-cuts-for-individuals-and-businesses/). The number of individual income tax brackets would be trimmed from seven to three brackets of 35%, 25% and 10%. Families would see the standard deduction doubled, effectively eliminating taxes on the first $24,000 of a couple’s income and receive tax relief for childcare. While most tax deductions would be scrapped, the two most popular—the mortgage-interest deduction and charitable deductions—would be preserved, Administration officials said. Under the plan, the corporate tax rate would be slashed from 35% to 15%. Companies would also pay a special one-time tax—the amount was not specified—to repatriate foreign earnings. Markets rose at the prospect of broad tax relief. But the enthusiasm might be misplaced if traders are expecting the one-page statement of principles the White House distributed Wednesday to become law anytime soon. The Committee for a Responsible Federal Budget [estimated the plan could cost between $3 trillion and $7 trillion](http://www.crfb.org/blogs/fiscal-factcheck-how-much-will-trumps-tax-plan-cost). Its base-case estimate, $5.5 trillion, would be 20% of U.S. GDP. “Even if tax cuts could generate more growth than estimated,” the group wrote, “no plausible amount of economic growth would be able to pay for a substantial portion of the tax plan.” The substance of the plan—which is so skeletal that it cannot be [scored](http://time.com/money/4703511/budget-cuts-donald-trump-federal-agencies/) yet by the Congressional Budget Office—is being hashed out in conversations with Capitol Hill Republicans, explained Treasury Secretary Steven Mnuchin and economic czar Gary Cohn, who repeatedly parried reporters’ questions about the details. Despite what Mnuchin characterized as months of work, the proposal is almost identical to the [principles Trump articulated](http://time.com/4495507/donald-trump-economy-speech-transcript/) on the campaign trail last year. Nor is it any clearer how Trump plans to pay for the tax cuts. Notably, the plan does not include the so-called [border adjustment tax](http://time.com/4686070/trump-address-congress-tax-reform/), a proposal that would scrap levies on U.S. exports and impose a 20% tax on imports. That tax code revamp, championed by the likes of House Speaker Paul Ryan, could have earned up to $1 trillion in revenue over the next decade, according to a Congressional Budget Office analysis. Ryan used it to partially offset the revenue loss incurred by the Speaker’s plan to reduce the corporate tax rate from 35% to 20%. But the the idea ran a wall of opposition from powerful retailers, and Trump’s team soured on it. There’s little question why the plan won a warm welcome on Wall Street, which has rallied during Trump’s presidency in large part due to the prospect of corporate tax relief and repatriation. There’s also plenty to like for high earners, including a repeal of the estate tax and alternative minimum tax. The current blueprint does not mention [closing the carried-interest loophole](http://time.com/money/4524379/carried-interest-second-presidential-debate/) used by wealthy private-equity and hedge-fund managers, which Trump often talked about on the campaign trail. It’s unclear how Trump’s own finances would be affected by the proposal, since he has defied decades of presidential precedent by refusing to release his tax returns. But his [recently surfaced 2005 return](http://time.com/4701747/donald-trump-rachel-maddow-taxes/?xid=homepage) suggests he paid more than $31 million that year under the AMT, which he has long pushed the government to jettison. While the proposal may be thin gruel as a policy document, there’s little doubt it has political appeal, which is especially important to Trump as he looks to soften coverage of his first 100 days. Tax breaks are popular, both among the voters who put Trump in office and the corporations counting on him to ease their burdens. Even if a true tax-reform package isn’t in the offing anytime soon—the last reform of the tax code took place more than 30 years ago—Trump’s party has the power to simply slash rates this year. That would juice the U.S. economy as Republicans head into a difficult election cycle in 2018\. Which, to Trump, may be as good a goal as any. ## Transcript We will have strong borders and we will have the wall and Mexico will pay for the wall. [ APPLAUSE ] Mexico will pay for the wall, believe me. So you may have heard Trump say something about Taxing Mexican imports to pay for the border wall. That's probably not gonna happen but what we think he was talking about was a little something called the border adjustment tax. Is really complicated and sometimes to help me understand really complicated topics I will doodle them out. My name is Haley Sweetland Edwards and I'm a policy correspondent at Time Magazine. [ MUSIC ] So there are four steps to understanding the border adjustment tax. The first step is just the basics and as it lowers the corporate tax rate from 35 % to 20 % percent. It's a big deal. The second thing it does is, it doesn't tax exports but it taxes imports. That's a big change from what we have now. And the third thing is that it doesn't tax corporate profits. It Taxes corporate cash flow, which is a slightly different thing, it means that it longer matters where your corporate headquarter is, you can have your corporate headquarters in Ireland, you can have it in Netherlands, you can have it in the Bahamas it doesnt matter, its only taxed when you sell things and where you sell things. So if you sell your goods in the US it's taxed at twenty percent. If you sell them abroad it's not subject to a US corporate tax. Step two. What's it mean for different companies? If you make your stuff in the US and you sell your stuff in the US your only going to see your Straight fall. It will fall from 35 % to 20 %. If you import your stuff from abroad and you're a major importer like Walmart or Target then your gonna see a 20 % tax on everything you import. That's a big difference. If you're the kinda of company that makes their stuff here Like Boeing, and export most of it. You're gonna pay 0 % on everything that you export. And that's a huge boon to those companies. All right, so step 3. Don't fall asleep on me here. This is where the economic theory kicks in. Economists, both liberals and conservatives, believe that this kind of tax, according to the textbooks, should make the US dollar stronger. And if that happens, that mean that imports Would get less expensive. One US dollar would buy more imports than it did before, and that would offset the impact of this tax. Companies like Walmart and Target, they would have to weather this first stage, but then it would even out. A lot of economists also disagree with that. They think the dollar wouldn't get strong enough to offset Set the tax. And others worry that it would just wreak havoc on the world market, because so other currencies rely on the strength or weakness of the US dollar. Okay, step four. Global impact. Now we really don't know if this has a chance of passing, but if it does then it has some major implications on the global stage. One problem is just rhetoric. If president Trump is gonna talk about this tax as slapping tariffs on other countries' imports, then that has the possibility of triggering a trade war. Meaning other countries are gonna slap retaliatory tariffs on our exports. [ MUSIC ] The other issue at stake here is how the World Trade Organization sees this tax. If they see it as protectionist, they can slap sanctions on the U. S. And while a whole bunch of other countries have taxes that are very similar to this. The way that politicians have talked about this proposal sounds pretty protectionist. So whether or not this tax passes now, you're still gonna be hearing about it for a really Really long time. It's been around since the 1970's. It will keep cropping up. And that's because corporate tax in America is broken. It's one of the highest taxes in the developed world, and it doesn't bring in the revenue that it should. This tax for all of it's flaws fixes a lot of those problems. It gets rid of loopholes, it eliminates the incentive. For corporations to hide their headquarters in other countries. And it's one of the only ways to make comprehensive tax reform revenue. [ MUSIC ] ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/4756442/trump-tax-reform-plan-mnuchin/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/4756442/trump-tax-reform-plan-mnuchin/"},"headline":"The White House Unveiled a Tax Reform Plan. 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