A blueprint of a Republican tax overhaul plan proposes tax cuts to wealthy Americans, businesses and the middle class while protecting deductions such as those for mortgage interest and charitable contributions.
The sweeping plan was unveiled Wednesday, the beginning of negotiations to revamp the U.S. tax code. It 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.
"We’re going to introduce a tax plan that’s the largest tax cut, essentially in the history of our country," President Donald Trump said Wednesday outside the White House. "It’s going to be something special. You already know some of the numbers, we’re going to give you some of the additional numbers."
Some outside budget experts estimate the blueprint could slash government tax revenue by more than $5 trillion over 10 years. To offset some of the lost revenue, Republicans must agree on the benefits to eliminate.
In order to get the bill enacted, Republican congressional leaders will have to unite their party and possibly garner some Democratic support.
The plan calls for a cut in the corporate tax rate, from 35 percent to 20 percent. It's a goal that has long had the support of House Republicans — although President Donald Trump has consistently pushed for a 15 percent corporate rate. The plan also proposes a one-time tax on the foreign earnings of U.S. companies.
Fewer income brackets
Individual income tax brackets would be streamlined from seven to three, and a larger number of people would qualify for the Child Tax Credit, which is aimed at helping low-income working families. The credit, currently $1,000 per child, would be expanded to higher-income families.
Other proposals, such as the elimination of the estate tax and the alternative minimum tax, would benefit upper-income earners.
The plan would maintain tax breaks for charitable giving and mortgage interest, and it also proposes amendments to the tax code that would benefit education and retirement.
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,'' said Senate Majority Leader Mitch McConnell, a Kentucky Republican.
Many Democrats, however, have said they will oppose changes that will 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 Minority Leader Chuck Schumer, a New York Democrat, told colleagues on the Senate floor.