(UPI) — President Donald Trump is proposing the “biggest” tax cut ever, including fewer income tax brackets and rates, administration officials said Wednesday.
Treasury Secretary Mnuchin and White House chief economic advisor Gary Cohn summarized the plan in a briefing to reporters at the White House.
Trump’s plan will cut the number of individual income tax brackets from seven to three, with a top rate of 35 percent and lower rates of 25 percent and 10 percent. The income ranges under those brackets were not spelled out.
During the campaign, Trump called for brackets of 10 percent, 20 percent and 25 percent but he raised them to more closely match what House Republicans were calling for: 12 percent, 25 percent and 33 percent. The highest bracket is now 39.6 percent.
All tax deductions except for the mortgage and charitable contribution deductions would be eliminated.
“We want to simplify the personal tax system, lower taxes and create economic growth,” Mnuchin said at an event hosted by The Hill. “So this is going to be the biggest tax cut and the largest tax reform in the history of our country and we are committed to seeing this through.”
Tax rates for businesses would drop from 35 percent to 15 percent, including corporations and owner-operated businesses known as “pass-throughs.” During the campaign, Trump promised this cut.
The White House wants an unspecified “one-time tax” on the trillions of dollars held by corporations overseas.
Eliminated would be the estate tax, known as the “death tax.”
The change reform is a bid to increase economic growth and allow businesses to become more competitive worldwide, Mnuchin said. But it doesn’t address how to offset the reduction of income taxes as well as Trump’s increased spending plans for infrastructure and defense.
Democratic National Committee Chairman Tom Perez said Trump’s tax cuts and planned budget are “morally bankrupt” because they benefit the wealthy. Perez’s comments were at the convention of National Action Network, a non-profit civil rights group, in New York.
Senate Minority Leader Charles Schumer of New York also was skeptical, saying the proposal would help wealthy Americans and businesses like those formerly run by Trump.
“We don’t need a tax plan that allows the very rich to use pass-throughs to reduce their rates to 15 percent while average Americans are paying much more,” Schumer said Wednesday on the Senate floor. “That’s not tax reform. That’s just a tax giveaway to the very, very wealthy that will explode the deficit.”
Congress must approve changes to the tax code, something the lawmakers haven’t done in more than 30 years.
“We’re committed to working, getting this thing done, getting everyone in the room and getting this thing passed,” Mnuchin said.