Taxes are an important part of the U..S economy, so Donald Trump wants to make some improvements on this. The American President is working with Democrats and Republicans to get successful tax reductions through Congress. According to a report by Reuters, Steven Mnuchin, the Treasury Secretary stated that tax cuts would be compensated by a growing American economy. The White House and the Congress have to work hard to expose a detailed program to get tax reductions but at the same time make the rich pay more. Paul Ryan, the House of Representatives Speaker, said that more details of the plan would be given on September 25.

Some analysts believe that the wealthy will find ways to avoid higher taxes.

Measuring the impact

Mnuchin stated that the US government would measure the impact of the Tax Reform on the national economy. The United States has a huge national debt and also a budget deficit, so, a tax reduction will exert pressure on these economic issues. Mnuchin believes that faster economic growth will pay for the tax reductions, if taxes are too high they can destroy the free initiative. Countries that have low taxes don't suffocate the businessmen, so, they can create jobs and wealth.

Higher taxes for the rich

The reform in the United States aims to reduce taxes in general, but wealthy people might have to pay more.

Democrats think that Republicans have favored the rich for a long time. Experts believe that Trump could increase taxes on the wealthy people by reducing the cap on mortgages eligible for interest deductions and making Wall Street fund managers pay more. Is it a good idea or could it become a break for the economic development in the long term?

The Reagan years

The U.S. had tax reform when Ronald Reagan was President and the economy revitalized a lot. He believed that high taxes were destroying the American economy, so, he decided to cut them. Not all was perfect during his time as president, but in general, it was positive for the U.S. economy. There was strong economic growth during the Reagan years and a huge number of jobs were created.

Other measures

There is one proposal to eliminate the deductions on state and local taxes, so, this money would be used to fund tax reductions for the American middle class. There are plans in the Senate that promote higher tax rates on dividends and capital profits, but not all the specialists believe this will be successful. An analyst at the Tax Policy Center, Steven Rosenthal, thinks that Trump could close one hole but the rich would find another way to pay less.