The White House just outlined its tax plan. Here's what's in it

Key Points
  • "We want to move as fast as we can," Treasury Secretary Steven Mnuchin says of the Trump tax plan.
  • Mnuchin had set a goal of passing the first tax reform since 1986 by August, but the White House has recently backed off that deadline.
The White House just outlined its tax plan. Here's what's in it
The White House just outlined its tax plan. Here's what's in it

Top White House officials outlined President Donald Trump's tax plan Wednesday, a proposal they said would be the "biggest tax cut" in U.S. history.

White House chief economic advisor Gary Cohn and Treasury Secretary Steven Mnuchin summarized the plan in a briefing to reporters at the White House. It largely echoes the proposal Trump outlined as a candidate and did not include some key details, according to a fact sheet provided by the White House.

  • Trump's plan will cut the number of income tax brackets from seven to three, with a top rate of 35 percent and lower rates of 25 percent and 10 percent. It is not clear what income ranges will fall under those brackets. It would also double the standard deduction.
  • The proposal will chop the corporate tax rate to 15 percent from 35 percent.
  • It would eliminate tax deductions, with only a few exceptions, including the mortgage interest and charitable contribution deductions.
  • The White House said there will be a "one-time tax" on the trillions of dollars held by corporations overseas. However, Mnuchin said the rate for that tax has yet to be determined. Mnuchin said the White House is "working with the House and Senate" on a repatriation rate, saying it would be "very competitive."
  • The plan would get rid of the estate tax, otherwise known as the "death tax." Cohn said the move will help privately held businesses and American farmers. Analysis of the estate tax reveals that it affects only a very small portion of Americans.
  • Mnuchin also said the U.S. would go to a "territorial" tax system. Though further details were not forthcoming, such systems typically exclude most or all of the income that businesses earn overseas.
  • Trump's plan would also repeal the alternative minimum tax and 3.8 percent Obamacare taxes.

Mnuchin would not answer if the plan would be "revenue neutral," meaning whether it would result in a larger U.S. budget deficit. He contended that it would "pay for itself with growth and with ... reduction of different deductions and closing loopholes."

Mnuchin: This plan will lower debt-to-GDP
Mnuchin: This plan will lower debt-to-GDP

Even before the Trump advisors outlined parts of the plan, many Democrats criticized it. Democrats argued that Trump's campaign plan would help corporations and the wealthy more than middle-class Americans.

Most independent analyses of Trump's campaign tax plan said it would balloon the budget deficit over time even after higher tax revenue from greater economic growth is factored in.

The White House appears not to support one possible revenue-raising tool, the controversial border adjustment provision included in the House tax plan.

"We don't think it works in its current form, and we're going to continue to have discussions with them about revisions," Mnuchin said at an event hosted by The Hill on Wednesday morning.

He said earlier that the White House wants a "combined plan" with the House and Senate, which could potentially clash with the administration over some provisions.

It is not yet clear when Congress could introduce legislation on tax reform. Mnuchin said Wednesday that he wants to see it passed by the end of the year. He previously set an August goal for passing a tax-reform plan, but the White House has backed off that timeline recently.

Mnuchin: This is massive tax reform & simplification
Mnuchin: This is massive tax reform & simplification

House Speaker Paul Ryan said earlier that he does not think Trump is overstepping by releasing the proposal Wednesday, adding that Congress and the White House are working to reach consensus on a plan.

"We've been briefed on what they're going to do, and it's basically along exactly the same lines that we want to go. ... We see this as progress is being made and we're moving and getting on the same page," Ryan told reporters at a news conference with House GOP leaders.

Asked Wednesday afternoon if he thought some Republicans could oppose the plan, Mnuchin said there is "a lot of desire from everybody" to pass tax reform.

Cohn said Wednesday the White House is in "constant dialogue" with the House and Senate about the proposal and eventually will release "very firm" details.

— CNBC's Ted Kemp contributed to this report

Watch: Bernstein says Trump's tax plan won't boost growth

Jared Bernstein: Trump's tax plan won't boost economic growth
Jared Bernstein: Trump's tax plan won't boost economic growth