The Trump administration unveiled a plan Wednesday for deep cuts in business taxes as part of a major overhaul of the US tax code in a bid to reinvigorate the world’s largest economy.
Under the plan, which was unveiled at the White House by Trump economic adviser Gary Cohn and Treasury Secretary Steve Mnuchin, the tax rate for public corporations and “pass-through” businesses would be slashed to 15 percent, Reuters reports.
The top corporate rate in the US is now 35 percent, while the peak rate for pass-throughs, which account for most small businesses, is 39.6 percent, the same top rate paid by individuals.
In another concession to long-standing demands from corporate America, President Donald Trump called for bringing corporate profits being held offshore by multinationals into the country at a rate well below the current 35 percent rate.
The administration did not say what the new rate would be, but said it will work with Congress on a low rate.
The move comes as about US$2.6 trillion in profits are being held tax-exempt abroad by US multinationals under a rule that says they are only taxable if brought into the United States.
For average US taxpayers, Trump proposed help by doubling the standard deductions for individuals who do not itemize; simplifying tax returns by reducing the number of tax brackets; and providing unspecified tax relief for families with child and dependent care expenses.
The president also called for repealing inheritance taxes on estates and the alternative minimum tax, both measures that would help a handful of wealthy taxpayers.
Trump’s list of tax cuts would reduce revenues for the US government, which is already running a deficit and deeply in debt, Reuters noted.
The president’s tax plan matched up closely with the promises he made during his 2016 election campaign.
Democrats immediately attacked the Republican president’s plan as fiscally irresponsible.
“President Trump’s tax plan is short on details and long on giveaways to big corporations and billionaires,” said Nancy Pelosi, the top Democrat in the House of Representatives.
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