Trump's tax proposal plans to cut corporate tax rate to 15 percent from 35 percent "to make US businesses the most competitive in the world", Secretary of Treasury Steven Mnuchin told reporters at the White House.
"Under the Trump plan, we will have a massive tax cut for businesses and massive tax reform in simplification. And that's why massive tax cuts and massive tax reform and simplifying the system is what we're going to do", Mnuchin told reporters in the White House briefing room.
USA businesses will reap a windfall if President Donald Trump's plan to cut corporate tax rates and slash taxes on cash parked overseas becomes law, but it is unclear whether the move will stimulate a surge in investment and job creation in return.
At the same time, Trump is proposing a reduction in the top rate on ordinary income to 35% from 39.6%. Families paying for child and dependent-care costs will be afforded increased tax benefits, Mnuchin explained, without providing detail.
The estate tax, also known as the death tax, which Trump has boisterously opposed for years, would be eliminated under his plan, as would be the alternative minimum tax.
Mnuchin, who will outline details of the tax plan at the White House later Wednesday, said the administration hopes to push the reform through Congress as quickly as possible.
Earlier, Treasury Secretary Steve Mnuchin described Trump's tax plan as "the biggest tax cut" and the "largest tax reform" in the US history.
Reports via CNN indicate that the president's tax plan, though still in its rudimentary stages, will more than likely be met with skepticism from lawmakers and politicians alike even though Republicans constitute the majority of Congress. Those owners are sole proprietors, partners or shareholders in what are called S corporations, or pass-through entities, which under the tax laws are meant to be small or mid-sized companies.
This federal deduction basically encouraged states to hike taxes, said Jonathan Williams, the chief economist for the American Legislative Exchange Commission, a state-centric public policy organization.
As President Donald Trump continues to buck the tradition of voluntarily disclosing his tax returns, state lawmakers on Wednesday introduced legislation that would force the release of his state returns for the last five years.
"I think that 20 percent is more realistic relative to world tax rates", Hananel said.
"We're committed to working, getting this thing done, getting everyone in the room and getting this thing passed", Mnuchin said.More news: Republican Ron Estes wins tight special election for US House seat
"Whenever you say 'tax cuts, ' most business owners are excited about that, especially in the state of California", Van Dorn said.
"We are going to double the standard deduction, so that a married couple won't pay any taxes on the first Dollars 24,000 of income they earn".
Cohn said he expects a long fight over the measure.
Perhaps the most contentious plank would enable taxpayers with business income - including those wealthy enough to pay the top tax rate - to instead pay the new 15% corporate rate.
House Minority Leader Nancy Pelosi, D-Calif., said the plan is the "same trickle-down economics that undermined the middle class", and said the president should work on a fiscally responsible bipartisan plan with Democrats.
"The difference between 1.6 per cent, 1.8 per cent GDP and three per cent is staggering", Mr Mnuchin said earlier.
"In order for a corporate income tax cut to 15 percent to be self-financing, it would have to raise the level of growth to 2.8 percent on average", he said.
The plan would reduce investment and estate taxes, helping the wealthy.
Democrats said they smell hypocrisy over the growing national debt, which stands at almost $20 trillion.
One of the big sticking points will be the cost.
President Trump's proposed changes to the tax code could increase the deficit by an estimated United States dollars 3 trillion to USD 7 trillion over the next decade, according to the Committee for a Responsible Federal Budget, an advocacy group focused on reducing deficits.