Trump proposal slashes taxes on businesses, the rich amid deficit worries

WASHINGTON (Reuters) - President Donald Trump on Wednesday proposed the biggest U.S. tax overhaul in three decades, offering to cut taxes for most Americans but prompting criticism that the plan favors the rich and companies and could add trillions of dollars to the deficit.

The proposal, which the Republican president said was aimed at helping working people and creating jobs, faces an uphill battle in Congress with Trump’s own party divided and Democrats hostile.

Republicans plan 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 including one that benefits people in high-tax states dominated by Democrats.

“It’s going to be something special,” Trump told reporters at the White House, touting it as “the largest tax cut essentially in the history of our country.”

The plan, forged during months of talks among Trump’s aides and top Republicans in Congress and embraced by big business, contained scant details about how to pay for the cuts without fueling deficits. 

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 would lower the top individual rate from to 35 percent from 39.6 percent, but also roughly double the standard deduction, a set amount of income exempt from taxation, for all taxpayers.

The plan 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.

Republicans hold a thin 52-48 majority in the Senate and may need some Democrats on board to win passage. But Democrats said the plan would expand the federal deficit in order to deliver tax cuts to wealthy Americans rather than the middle-class families that Trump and Republicans say they are trying to help. - Read More

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