Trump promises 'massive cuts' on taxes, regulations

Updated 2017-01-24 11:00:25 Xinhua

U.S. President Donald Trump on Monday told a group of business executives that the administration will cut taxes and regulations massively and impose a "very major border tax" on companies which shift production overseas.

"What we're doing is we are going to be cutting taxes massively for both the middle class and for companies," Trump said at a meeting with corporate executives, including Elon Musk of Space X and Dow Chemical CEO Andrew Liveris.

He added that the administration will work with the Congress to try to get the corporate tax rate down to the range from 15 percent to 20 percent. During his campaign, Trump has promised to reduce corporate tax rate to 15 percent.

Trump on Monday also suggested that a roll-back of business regulations would be the focus of his economic plan.

"A bigger thing, ..., is the fact that we're gonna be cutting regulation massively," said Trump, adding that "we can cut regulations by 75 percent, maybe more."

Tax cuts and regulation reduction are the two major tools for the Trump administration to achieve its promise to create 25 million new American jobs in the next decade and to boost the economic growth to 4 percent.

Trump on Monday also told business executives that the administration would make it easier for companies to start business in U.S, and warned that the administration will levy a "very major border tax" on companies that are shifting production overseas.

Many economists pointed out that Trump's expansionary fiscal policy plan might push up inflation in U.S., considering the economy is close to full employment.

A faster inflation growth might lead the Federal Reserve to raise interest rates faster than expected, which would result in further appreciation of the U.S. dollar, according to economists.

"An appreciation of the U.S. dollar is the last thing that the country needs if it is to reduce its trade deficit," said Desmond Lachman, a senior fellow at the American Enterprise Institute. During the campaign, Trump has vowed to reduce the nation's trade deficits by renegotiating trade deals and strengthening trade enforcement.

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