Treasury Secretary Steve Mnuchin told Congress Monday that members must either pass comprehensive tax reform or prepare for big losses in the stock market.
“There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done,” Mnuchin told Politico’s “Morning Money” podcast. “To the extent we get the tax deal done, the stock market will go up higher. But there’s no question in my mind that if we don’t get it done you’re going to see a reversal of a significant amount of these gains.”
The treasury secretary guaranteed that tax reform will pass through both chambers of Congress before lawmakers leave Washington at the end of the year. Mnuchin’s comments are a step back from President Donald Trump’s, who said Monday that his administration may not pass tax reform in 2017.
Trump wants to cut the corporate tax rate from 35 to 20 percent, and to shrink the number of individual tax brackets from seven down to three tiers at 12 percent, 25 percent and 35 percent. Other features of the plan that voters indicated they would support include a one-time repatriation tax for income held overseas and a repeal of the estate tax.
The U.S. stock market has been on a tear since President Donald Trump took office, gaining roughly 25 percent of its value since Election Day 2016.
The Dow Jones Industrial Average, S&P 500 and NASDAQ indexes have closed at record-setting 130 times and made some $4 trillion in gains since President Donald Trump defeated former Secretary of State Hillary Clinton in 2016.
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