US has ‘once in a generation opportunity’ on tax reform: Cohn

The big reveal is here.

Gary Cohn, the former Goldman Sachs banker who now heads the government’s National Economic Council, on Wednesday called US President Donald Trump’s push for tax reform “a once in a generation opportunity to do something really big” by slashing and simplifying taxes for individuals and corporations.

Steven Mnuchin, the treasury secretary, said that — as promised during the campaign — businesses both large and small will have a “massive tax cut” and “massive tax reform and simplification”.

Pushing through the tax plan will require support from lawmakers in Mr Trump’s Republican party, and likely some help from Democrats as well. “This isn’t going to be easy,” Mr Cohn said. “Doing big things never is.”

Among other things, the plan aims to:

• reduce the corporate tax rate from 35 to 15 per cent

• move the US to a “territorial” tax system to tax business on revenues and costs incurred in the US

• impose a one-time tax on overseas profits to induce companies to move overseas earnings back onshore

• reduce the number of individual tax brackets from seven to three (10 per cent, 25 per cent and 35 per cent)

• do away with the estate tax, also known as the “death tax”

• eliminate the alternative minimum tax (AMT)

• double the standard deduction

• return the top capital-gains tax rate to 20 per cent

• reduce most deductions for individuals, leaving mortgage interest and charitable deductions