WASHINGTON: Treasury Secretary Steven Mnuchin has said an overhaul of the tax system, regulatory reform and better trade deals will help produce 3pc US economic growth within two years. Returning health in the US job market, a 12pc rise in stock prices since Donald Trump’s election and consumer sentiment at the highest in 16 years paint an optimistic picture of the US economy. Even so, the US economy expanded at its slowest pace in three years, at 0.7pc, in the first quarter, underlining the challenges of an administration aiming for 3pc or higher annual growth. It’ll probably take two years to reach 3pc growth “and then we can have a sustained level”, Mr Mnuchin said in a conversation with Fox Business Network editor Maria Bartiromo at the Milken Institute Global Conference.
The Trump administration has placed an overhaul of the tax system, describing it as the biggest reform in history, at the top of its legislative agenda. A blueprint released last week includes proposals to slash taxes for business and individuals, simplify the system for filers and close loopholes for the rich, relying on faster economic growth to offset the losses from tax cuts. The goal is for a tax-reform package to be signed into law this year. The tax plan is “our version” of a job creation bill, Mr Mnuchin said. The difference between 2pc and 3pc annual growth can generate $2trn in revenue over about 10 years, he said. Plans for regulatory “relief” and re-examining trade deals that aren’t fair to the US will also stoke growth, Mr Mnuchin added. The IMF forecasts the US economy will expand by 2.3pc this year.
