Treasury Secretary Steven Mnuchin this week called on Congress to make permanent the individual tax cuts included in the 2017 tax law, saying the economy would benefit.
Mnuchin was testifying Feb. 12 on the administration’s fiscal 2021 budget plan, which assumes the tax law’s temporary cuts to individual tax rates will be extended. Under the Tax Cuts and Jobs Act, the individual tax cuts would expire after 2025.
White House National Economic Council Director Larry Kudlow said that President Trump is still planning to unveil a new “tax cuts 2.0” proposal this summer as he campaigns for reelection. Kudlow did not provide specifics about the plan but said the goal will be to “help middle-class economic growth.”
Passage of another tax cut plan would likely hinge on whether Republicans are able to regain the majority in the House and maintain their Senate majority. Just before the 2018 midterm elections, Trump also promised a 10 percent middle-class tax cut but dropped the idea after Republicans lost the House. Reducing the individual tax rate to 15 percent might encourage consumer spending but would add to the growing deficit unless the cuts were offset by spending reductions to federal programs. The 2017 tax law added more than $1.5 trillion to the federal deficit.