Donald Trump said he would cut the corporate tax rate, slash regulations and conduct an audit of the federal government, embracing an idea proposed by billionaire backer Elon Musk, as he pitched his economic agenda to Wall Street and corporate leaders in New York.
“I am promising low taxes, low regulations, low energy costs, low interest rates, secure borders, low, low, low crime,” Trump said Thursday at the Economic Club of New York in what was billed as a major address on the economy, drawing a contrast with his Democratic rival Kamala Harris.
The centerpiece of Trump’s address was a push to reduce the corporate tax rate to 15% for companies that make their products in the U.S. That move would be a large reduction from the current 21% rate — a key policy win from Trump’s own 2017 tax law.
Former President Donald Trump
Al Drago/Bloomberg
“We want to make our goods in America and most of them we can,” Trump said. “If you outsource, offshore or replace American workers, you are not eligible for any of these benefits. In fact, you will pay a very substantial tariff, when a product comes in from another country.”
When Trump was president, he sought to reduce the corporate rate from 35% to 15%, but ultimately landed on 21% after pressure from Republicans to pare back the cuts to allow for more tax benefits for households.
A 15% corporate rate would represent a major win for large U.S. corporations, but it would also contribute to rising deficits. It would also mean that big companies would end up paying far lower rates than smaller, privately-held businesses, where rates can be as high as 37%.
Trump’s proposal is also in direct opposition to Harris’ vision for corporate taxes. She has called to increase the corporate rate to 28%.
A push to lower the corporate tax rate also threatens to spark a major policy fight in Washington. Major portions of Trump’s 2017 tax law expire in 2025, which will force Congress to negotiate over whether to extend those cuts.
Government efficiency
Trump on Thursday also vowed to establish a government task force to review federal expenditures, an idea recommended by Musk, the Tesla Inc. and SpaceX chief executive officer who is the world’s richest person. Trump said the commission would be “tasked with conducting a complete financial and performance audit of the entire federal government and making recommendations for drastic reforms.”
Musk, in a conversation with Trump on X last month, called for a federal task force to ensure that taxpayer money is spent effectively and pitched himself for a role in that effort. Trump said Musk, who has endorsed the former president and criticized Harris on his social media platform, could lead that commission. The former president has praised Musk as “the greatest cutter.”
Trump often boasts about how many regulations were cut during his term as president after signing an executive order shortly after taking office ordering that at least two regulations had to be identified to be repealed whenever a new one was proposed.
On Thursday, he pledged to eliminate 10 regulations for every new regulation if elected.
Gary Shapley, who was named only days ago as the acting commissioner of the Internal Revenue Service, is reportedly being replaced by Deputy Treasury Secretary Michael Faulkender amid a power struggle between Treasury Secretary Scott Bessent and Elon Musk.
The New York Times reported that Bessent was outraged that Shapley was named to head the IRS without his knowledge or approval and complained to President Trump about it. Shapley was installed as acting commissioner on Tuesday, only to be ousted on Friday. He first gained prominence as an IRS Criminal Investigation special agent and whistleblower who testified in 2023 before the House Oversight Committee that then-President Joe Biden’s son Hunter received preferential treatment during a tax-evasion investigation, and he and another special agent had been removed from the investigation after complaining to their supervisors in 2022. He was promoted last month to senior advisor to Bessent and made deputy chief of IRS Criminal Investigation. Shapley is expected to remain now as a senior official at IRS Criminal Investigation, according to the Wall Street Journal. The IRS and the Treasury Department press offices did not immediately respond to requests for comment.
Faulkender was confirmed last month as deputy secretary at the Treasury Department and formerly worked during the first Trump administration at the Treasury on the Paycheck Protection Program before leaving to teach finance at the University of Maryland.
Faulkender will be the fifth head of the IRS this year. Former IRS commissioner Danny Werfel departed in January, on Inauguration Day, after Trump announced in December he planned to name former Congressman Billy Long, R-Missouri, as the next IRS commissioner, even though Werfel’s term wasn’t scheduled to end until November 2027. The Senate has not yet scheduled a confirmation hearing for Long, amid questions from Senate Democrats about his work promoting the Employee Retention Credit and so-called “tribal tax credits.” The job of acting commissioner has since been filled by Douglas O’Donnell, who was deputy commissioner under Werfel. However, O’Donnell abruptly retired as the IRS came under pressure to lay off thousands of employees and share access to confidential taxpayer data. He was replaced by IRS chief operating officer Melanie Krause, who resigned last week after coming under similar pressure to provide taxpayer data to immigration authorities and employees of the Musk-led U.S. DOGE Service.
Krause had planned to depart later this month under the deferred resignation program at the IRS, under which approximately 22,000 IRS employees have accepted the voluntary buyout offers. But Musk reportedly pushed to have Shapley installed on Tuesday, according to the Times, and he remained working in the commissioner’s office as recently as Friday morning. Meanwhile, plans are underway for further reductions in the IRS workforce of up to 40%, according to the Federal News Network, taking the IRS from approximately 102,000 employees at the beginning of the year to around 60,000 to 70,000 employees.
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