WASHINGTON: US President Donald Trump will launch a series of "globally competitive" tax reforms which he said would bring back trillions of dollars stacked abroad.
While announcing his plans, Trump warned members of Congress not to "disappoint" him, predicting that lawmakers would make a "comeback" to pass a comprehensive measure to overhaul the tax code.
"This is our once-in-a-generation opportunity to deliver real tax reform for everyday hardworking Americans, and I am fully committed to working with Congress to get this job done. I don't want to be disappointed by Congress, do you understand me? Do you understand?" Trump said, amidst applause from his supporters in Springfield in Missouri.
Noting that the last major tax rewrite was 31 years ago, Trump said the new tax reforms will eliminate dozens of loopholes and special interest tax breaks, reduce the number of tax brackets from fifteen to two, and lower tax rates for both individuals and businesses.
Trump said his "globally competitive" tax reforms are based on four principles.
"First, we need a tax code that is simple, fair, and easy to understand. That means getting rid of the loopholes and complexity that primarily benefit the wealthiest Americans and special interests," he said.
"Second, we need a competitive tax code that creates more jobs and higher wages for Americans. It's time to give American workers the pay raise that they've been looking for many, many years," he said.
Trump said the third principle for reform is tax relief for middle-class families.
"We will lower taxes for middle-income Americans so they can keep more of their hard-earned paychecks, and they can do lots of things with those paychecks. That really means buying product ideally made in this country, but that means they’ll go out, and they’ll spend their money," he said.
"Fourth and finally, we want to bring back trillions of dollars in wealth that's parked overseas. Because of our high tax rate and horrible, outdated, bureaucratic rules, large companies that do business overseas will often park their profits offshore to avoid paying a high US tax if the money is brought back home. So they leave the money over there," said the US President.
The amount of money we're talking about is anywhere from USD 3 trillion to USD 5 trillion.
"By making it less punitive for companies to bring back this money, and by making the process far less bureaucratic and difficult, we can return trillions and trillions of dollars to our economy and spur billions of dollars in new investments in our struggling communities and throughout our nation," he said.
Trump said his administration is embracing a new economic model.
"It is called very simply: The American Model. Under this system, we will encourage companies to hire and grow in America, to raise wages for American workers, and to help rebuild our American cities and communities," he said.
"That is how we will all succeed and grow together, as one team, with one shared sense of purpose, and one glorious American destiny," said the US President.
"The tax reform plan Trump announced today is a vital measure for strengthening US prosperity as well as global prosperity through investment and job creation," said Secretary of State Rex Tillerson.
"A strong economy is a fundamental element of US foreign policy, and the State Department will continue to engage in economic diplomacy to bolster the prosperity of our nation through increased investment and trade," he said.
However, Trump's Democratic opponent described this as a billionaires-first tax plan.
"Instead of offering the American people a plan for real, job-creating tax reform, President Trump is pushing a billionaires-first, trickle-down tax scheme that hands out massive tax cuts to the wealthiest, at the expense of American families," said Nancy Pelosi, a Democratic leader.
House Democratic Caucus Chairman Joe Crowley said the tax plan is a "joke".
"It provides no details and has no basis in reality. After nine months in power, President Trump and Republicans in Congress have failed to provide any solutions to lower the tax burden for working Americans or to make our tax code simpler for small business owners," he alleged.