Family of Four

More than 100 Treasury staff members are working on the tax plan, Mnuchin said. Yet, as he and Trump’s top economic adviser, Gary Cohn, made clear Wednesday, much work remains.

Asked how Trump’s plan would affect a family of four making $60,000 a year, Cohn said: “It’s going to be a tax cut.” Pressed for specifics, he said: “We will let you know the specific details at the appropriate moment.”

In general, for individual income taxes, the plan calls for reducing the current seven tax rates to just three: 10 percent, 25 percent and 35 percent—but it doesn’t include the income thresholds associated with those rates. That makes it impossible to determine the revenue cost of the changes. “We are moving as quickly as we can,” Mnuchin said.

U.S. stocks, which have hit record highs since November partly due to the expectation of business-friendly tax changes, reversed course and erased daily gains on Wednesday. The Standard & Poor’s 500 Index halted a two-day rally.

‘Critical Guideposts’

Republican congressional leaders greeted the announcement coolly, with an emailed statement that said the bullet-points would serve as “critical guideposts” in what’s expected to be a months-long effort to overhaul the U.S. tax code.

Whether the eventual legislation aims for a deficit-neutral tax plan—one that balances its cuts with new revenue—will be a major question. Trump’s list of tax principles was immediately assailed by Democrats, who say it would blow out the federal deficit.

“It’s clearly fiscally reckless and it’s a massive tax cut for the richest,” said Chuck Marr, the director of federal tax policy at the Center on Budget and Policy Priorities, a Washington policy group that focuses on measures to fight poverty. He called Mnuchin’s suggestion that growth would pay for the tax cuts “pure fantasyland.”

“The claim that his multitrillion-dollar tax cut will pay for itself is as incredible as the claim that Mexico will pay for his multibillion-dollar border wall,” said Representative Lloyd Doggett, the leading Democrat on the House Ways and Means Tax Policy subcommittee. Before the announcement, Senate Democratic Leader Chuck Schumer said his party would oppose any plan that provided tax breaks for the highest earners.