Trump says he will release tax reform package next week
- Author: Rita Burton Apr 22, 2017,
Apr 22, 2017, 1:48
US stocks rose on Thursday after comments made by President Donald Trump lifted steel stocks, Treasury Secretary Steven Mnuchin said the administration was close to "major tax reform", and companies released quarterly results.
Hoping to improve economic growth, the Trump administration embarked Friday on new efforts to study and possibly dismantle some of the tax and financial regulations established by former President Barack Obama.
Administration officials have signaled they want to crack down on Wall Street, but some of the steps they have taken so far suggest they will be clearing back Wall Street regulations.
Mnuchin defended the timing of the executive order ahead of the release of the tax reform bill, saying some regulations wouldn't be addressed by the as-yet-unseen tax reform bill, which is why Trump's executive order is necessary. Among those efforts were regulations to prevent moves like "earnings-stripping", in which a US subsidiary borrows from a parent company and uses the interest payments on the loans to offset its earnings, to make inversions less attractive financially. It drew fire from worldwide tax lawyers and multinational corporations, which argued that it went too far. Subsequent gains in tax revenues produced by quicker economic growth would only be an additional bonus. Both House Republicans and the White House broadly agree on rate cuts for individuals and businesses.
Dodd-Frank's Orderly Liquidation Authority allows the Federal Deposit Insurance Corp.to take over a failing institution and liquidate it over time potentially using temporary funds set aside by the Treasury Department.More news: Japan says differences with US on economic talks
The report will offer views on using bankruptcy as an alternative, the impact of failing companies on financial stability, and whether the authority could drive up taxpayer costs or encourage excessive risk-taking.
One temporarily bars regulators from identifying new non-bank financial institutions as "systemically important financial institutions", or SIFIs, while also ordering a review of this process, Mnuchin said in a briefing with reporters. It requires them to hold more capital in reserve in the event of financial emergencies. Mnuchin said Thursday that administration officials are looking at whether there should be four brackets instead of three.
"It's such a big thing", said Trump. But rules came under fire from Republicans, who said the measures overstepped administration authority and could discourage foreign investment in the United States.
Mnuchin insisted that this would not be the case.
The review could cover regulations the Obama administration issued a year ago to crack down on inversions, in which USA companies take up foreign addresses through mergers with other firms to cut their tax bills.