US President Donald Trump on Wednesday proposed a sweeping overhaul of the nation’s tax code, touting it as a “historic’ move that will boost economic growth and spur job creation.
The plan aims to lower corporate income tax rates, cut taxes for small businesses, reduce the top income tax rate for individuals and scrap some widely used tax breaks, Reuters reports.
Forged during months of talks among Trump’s aides and top Republicans in Congress, the plan contained scant details about how to pay for the cuts without fueling deficits, the report noted.
Speaking at an event in Indianapolis, Trump called the plan the largest tax cut in US history and “historic tax relief to the American people”.
“This is a once-in-a-generation opportunity,” Trump said. “We want tax reform that is pro-growth, pro-jobs, pro-worker, pro-family and yes tax reform that is pro-American.”
Trump rejected criticism that the tax overhaul plan favors the rich.
The proposed legislation faces an uphill battle in Congress with Trump’s own party divided and Democrats hostile.
Republicans have produced no major legislative successes since Trump took office in January even though they control the White House and both chambers of Congress.
A comprehensive rewrite of the US tax code has eluded lawmakers for decades. The last one was passed in 1986.
The White House said that under the proposal typical middle-class families would have less of their income subject to federal income tax.
Trump noted that the first US$12,000 earned by an individual and the first US$24,000 by a married couple would be tax-free.
The plan would lower the top individual rate from to 35 percent from 39.6 percent.
It foresees a 20 percent corporate income tax rate, down from the current 35 percent but not as low as Trump’s initial demand for 15 percent.
The proposal now faces a long legislative process that could take months.
Trump has appealed to Democrats to support the plan, although they were not consulted in drafting it.
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