WASHINGTON: US President Donald Trump has introduced 'once-in-a-generation' tax plans which he said will bring relief to the working Americans, spur job growth and reform the tax code.
Promising a "middle-class miracle", Trump proposed to reduce the current seven tax brackets to just three of 10, 25 and 35 percent; double the standard deductions and provide relief for families with child and dependent care expenses.
"This is a once-in-a-generation opportunity, and I guess it's probably something I can say that I'm very good at. I've been waiting for this for a long time," the billionaire turned- politician said.
"We're going to cut taxes for the middle class, make the tax code simpler and more fair for everyday Americans, and we are going to bring back the jobs and wealth that have left our country -- and most people thought left our country for good," Trump said in his speech in Indiana yesterday.
Observing that for several months, his administration has been working closely with the Congress to develop a framework for tax reform, Trump said the House and Senate over the next few months will build on this framework and produce legislation that will deliver more jobs, higher pay, and lower taxes for middle-class families, and for businesses of all sizes.
"We want tax reform that is pro-growth, pro-jobs, proworker, pro-family, and, tax reform that is pro-American. It's time to take care of our people, to rebuild our nation, and to fight for our great American workers," he said.
Trump, a real estate mogul, has an array of properties, including hotels, golf courses and casinos.
Ruing that the total business US tax rate is 60 percent higher than its average foreign competitors in the developed world, Trump said by doing so the US has "surrendered" its competitive edge to other countries.
"But we're not surrendering anymore. Under our framework, we will dramatically cut the business tax rate so that American companies and American workers can beat our foreign competitors and start winning again," he said.
"We will reduce the corporate tax rate to no higher than 20 per cent. That's way down from 35 and 39 which is substantially below the average of other industrialised nations.
Calling the move a "revolutionary change", Trump said the "biggest" winners from this programme will be the everyday American workers as "companies will start competing for American labour and wages will start going up at levels that you haven't seen in many years".
Trump said corporations have parked many trillions of dollars in foreign countries, and many have incorporated abroad in order to avoid the punitive tax system altogether.
"And some companies actually leave our country because they have so much money overseas -- so much, it's an incredible amount -- that they move the company to get their money. We're going to let them bring the money back home," he said.
The new framework will stop punishing companies for keeping their headquarters in the US, he added.
"We will impose a one-time low tax on returning money that is already offshore so that it can be brought back home to America where it belongs and where it can be put to work and work and work," he said.
These reforms, he said, will be a dramatic change from a failed tax system that encourages American businesses to ship jobs to foreign countries that have much lower tax rates.
"It's what we can't-do. Our competitors have much lower tax rates. But no longer. My administration strongly rejects this offshoring model, and we have embraced the new model. It's called the American model," he said.
Democrats, however, called the plan disappointing.
"As the details of the plan have been trickling out, I've been disappointed that the House Republican leadership has taken the same secretive approach to taxes that they brought to health care," said Indian-American Congressman Raja Krishnamoorthi.
"We need tax reform that helps working families and small businesses without blowing up the deficit, but this plan doesn't include any information on how it will pay for its tax cuts," he added.
Rallying support for tax cuts by saying they'll pay for themselves may be easy but isn't true or responsible. It's like when my kids want to skip the vegetables and have ice cream for dinner," he said.