The Trump administration is targeting an effective tax-rate hike on hedge funds and some accounting firms as part of a broader overhaul of the United States tax system, Treasury Secretary Steve Mnuchin said Tuesday at an industry conference.
"This is the most important issue for the American economy", Mnuchin, a former Goldman Sachs partner, said. "And what's more important is making sure we have a competitive system".
Trump vowed to reduce the corporate tax to 15 percent to attract more companies to do business in the United States.
"The president has been very clear that for hedge funds, they will not have the benefit of carried interest", Mnuchin said Tuesday morning.
"I'm hopeful that they'll get a slight decrease in federal government [taxes] which will offset what they will lose on the state deductions", Mnuchin said of taxpayers who benefit from state deductions.
House Speaker Paul Ryan, who insisted on a revenue-neutral approach on tax reform, said last week that Trump's goal of lowering the corporate tax rate to 15 percent would be hard to achieve. But if Republicans want to pass a tax bill through reconciliation to prevent a Democratic filibuster, the legislation can't add to the deficit outside the budget window. Eliminating those provisions, in general, would affect high-tax blue states like NY and California. No plan or legislation has been released by Congress or the White House yet, but Mr. Mnuchin heads to Capitol Hill later today to meet with lawmakers on the issue.
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