Treasury Secretary Steven Mnuchin told the Wall Street Journal and CNBC on Thursday that the White House is “very committed” to enacting significant tax reform by August, before Congress leaves Washington for its summer recess.
That’s more optimistic than what many Washington observers and Wall Street strategists have been expecting lately but good news for a stock market that has rallied to record highs based on expectations for tax reform as well as deregulation and infrastructure spending.
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Richard Bernstein, CEO and chief investment officer of Richard Bernstein Advisors LLC, commenting on Mnuchin’s statements, said later on CNBC that if tax reform is not approved by August, market risks will rise.
Mnuchin explained that the No. 1 economic issue for the Trump White House is growth and tax reform is the prime way to achieve faster growth.
He said tax reform could increase growth to a 3% annual rate toward the end of 2018, which is sharply above forecasts by the Federal Reserve, the Congressional Budget Office and many Wall Street economists.
Mnuchin also said that the Trump tax reform plan would focus on middle-income tax cuts, simplification and business competitiveness and that tax cuts for upper income taxpayers would be offset by a reduction in deductions and other things, which he has said before.