U.S. President Donald Trump promoted his sweeping tax cut proposal before the nation's largest manufacturing advocacy group Friday, saying lower rates will make American businesses more robust global competitors.
"Under my administration, the era of economic surrender is over and the rebirth of American industry is beginning," Trump declared in a speech to the Washington-based National Association of Manufacturers.
Trump said the plan would cap the tax rate for most small and medium-sized businesses at 25 percent, a rate he said these types of enterprises have not seen in more than 80 years. "And it will be rocket fuel for the economy," he said.
The current tax code, Trump said, "punishes companies" for conducting business in the United States, encouraging them to relocate overseas, where he said there is an estimated $3 trillion in U.S. corporate wealth. "That’s stopping, and it’s stopping right now. We need a tax system that encourages companies to stay in America, grow in America, and hire in America.”
$5 Trillion tax cut plan
Trump's speech comes two days after a blueprint of a more than $5 trillion Republican tax cut plan was unveiled. It proposes tax cuts for wealthy Americans, businesses and the middle class while protecting deductions such as mortgage interest and charitable contributions.
The blueprint lacks critical details about the many tax breaks the White House and Republican congressional leaders want to eliminate to offset some of the trillions of dollars in revenue that would be lost through tax cuts. The administration contends that the overhaul would bolster the economy and create job growth in manufacturing and other sectors.
Trump touted several of the plan's provisions, including tax relief for investment in new equipment.
"That means more production, more investment and more jobs," he said.
The plan also calls for a corporate tax rate from 35 to 20-percent, a goal that has long had the support of House Republicans, and a one-time tax on the foreign earnings of U.S. companies.
Some outside budget experts estimate the blueprint could slash government tax revenue by more than $5 trillion over a 10-year period. To offset some of the lost revenue, Republicans must agree on cutting the federal budget.
In order to become law, Republican congressional leaders are tasked with attempting to unite their party, and the possibility of garnering some Democratic support.
Republicans control the White House and both houses of Congress, giving them a rare opportunity to revamp the tax code.
"This is our once-in-a-generation opportunity to fundamentally rethink our tax code. We can unleash the economy, promoting growth, attracting jobs, and improving American competitiveness in the global market,'' Senate Republican Leader Mitch McConnell said Tuesday.
Democrats oppose changes
Many Democrats, however, have said they will oppose changes that increase debt or benefit the wealthiest citizens.
The Republican plan "would result in a massive windfall for the wealthiest Americans and provide almost no relief to the middle class taxpayers who need it most," Senate Democratic Leader Chuck Schumer told colleagues this week on the floor of the chamber.