US President Donald Trump proposed the biggest tax overhaul in three decades - a plan that would slash rates on businesses and the wealthy - but it faces an uphill battle in congress with his own party divided and Democrats hostile.
The plan offered scant details about how to pay for the cuts without dramatically driving up federal deficits. It was forged during months of high-level talks among Trump's aides and top Republicans in Congress.
The proposal would lower corporate income tax rates, cut taxes for "pass-through" businesses, reduce the top income tax rate for individual Americans and scrap some widely used tax breaks including one that benefits people in high-tax states, dominated by Democrats.
Big business embraced the plan, while Democrats voiced opposition. 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.
The tax plan was outlined the day after the Republicans' top legislative priority, an overhaul of the US healthcare system, collapsed in the senate, while another key item on Trump's wish list, infrastructure spending, has yet to materialise.
A comprehensive tax overhaul has eluded lawmakers for decades. The last one was passed in 1986.
Trump has said the tax overhaul would provide tax relief to middle-class Americans, and the White House said that under the proposal typical middle-class families would have less of their income subject to federal income tax.
The plan foresees a 20 percent corporate income tax rate, down from 35 percent now. Trump had initially proposed a 15 percent rate.
Trump has appealed to Democrats to support the plan, although they were not consulted in drafting it.
"If this framework is all about the middle class, then Trump Tower is middle-class housing. It violates Trump's tax pledge that the rich would not gain at all under his plan," said Senator Ron Wyden, the top Democrat on the tax-writing Senate Finance Committee.
Reuters.
