President Donald Trump announced a Republican tax reform plan Wednesday, intended to provide a “middle-class miracle” for many Americans and with changes to relieve corporations from what the White House called a “punitive” system.
Trump unveiled details of the plan before an enthusiastic crowd in Indianapolis, Indiana, saying this was a “once in a generation” opportunity to offer tax relief to working Americans.
He called the “outdated, complex and extremely burdensome” tax code “a relic and a colossal barrier” that stands in the way of a U.S. economic comeback.
Trump said taxpayers spend billions of dollars every year on professional help to figure out their tax returns.
Under the Republican proposal, the president said, tax regulations will be “simple and fair,” and most Americans’ annual tax returns will fit on a single sheet of paper.
The plan would broaden the lower income levels at which no tax is levied. Tax credits for families with children would be increased, and the standard deduction applicable to all Americans would be doubled in some cases.
The president told the crowd that the benefits of tax reform should be focused on “everyday, hardworking Americans,” not higher-income people whom he called wealthy and well-connected, including himself. Trump has said he personally will not benefit from his proposed tax reforms.
Lured by competitors
Many foreign companies avoid doing business in the U.S., or leave American markets quickly, the president said, because competitor nations can attract corporations with lower tax rates than those in the “punitive tax system” in the United States.
Reduced taxes on businesses and more generous deductions will lead to more jobs and higher wages, Trump said, and provide an incentive for companies based abroad to set up shop in the U.S.
Any tax plan would have to meet congressional approval, which could come only after an expected lengthy period of debate and negotiations on Capitol Hill. If lawmakers and the White House can eventually agree on a spending plan for the government during the new fiscal year, details of that budget also would influence the tax reform program.
Some conservative Republican lawmakers were already hailing Trump’s tax proposals. Many opposition Democrats, however, said the reforms would benefit wealthy Americans far more than middle-class families.
Details of Trump’s proposals were not yet complete, but the nonpartisan Committee for a Responsible Federal Budget estimated the tax reforms could add $2.2 trillion to the national debt over the next 10 years. The group said any new tax revenue from businesses whose growth might be increased because of the reforms would be much smaller than the overall reduction in taxes paid to the U.S. Treasury.