President Donald Trump will address a joint session of Congress later tonight, where he has promised to delve into the details of his budget. He’s also expected to discuss the administration’s plans for defense, stimulus spending, the repeal of the Affordable Care Act, tax reform and taxes related to trade.
Earlier this month, Trump promised to reveal a tax reform plan within two to three weeks. Expectations are high, as investors wait to see how the president will deliver on his campaign promises, and traders look for Trump to clarify his stance on the controversial border-adjustment tax in particular.
Supporters of the tax say it will allow Congress to cut the corporate tax rate from 35 percent down to 20 percent through a $1 trillion revenue offset. Proponents also say the dollar will rise 20% in value, encouraging companies to support production in the Unites States. Retailers argue the tax will raise prices for consumers on imports and goods made stateside, and many economists are skeptical about the dollar rising fast enough.
Treasury Secretary Steven Mnuchin told CNBC Thursday, the administration had not “made up its mind” on the controversial border-adjustment tax, a key component of the House tax plan. Mnuchin also said the White House is working on a combined plan with Congress and would have something ready by August, but plans to tackle the Affordable Care Act first.
The stock market has rallied since election day, producing $2.9 trillion in paper gains, according to Wilshire Associates. Trump’s speech later tonight is being billed by many on Wall Street as his most important since taking office, as investors are anxious to hear more specific details of Trump’s proposed tax cuts and plans to boost economic growth.
Consumer confidence peaked once again in February, reaching its highest level since July 2001, according to a report Tuesday from New York-based Conference Board. Consumers are also eager to hear Trump present a follow-through plan with regard to his proposed tax cuts and reformed government spending.