The plan has faced criticism that it favours the rich and could add trillions to America’s deficit
US President Donald Trump has proposed the most radical changes to the country’s tax regime in decades.
The plan includes a sharp fall in corporate tax rates, bringing the country closer to Ireland’s rate of 12.5%.
President Trump’s proposal would see US corporate tax cut from 35% to 20% and includes a measure to encourage US firms to bring home their profits through a once-off lowered rate on wealth brought in to the country from overseas.
The plan involves tax cuts for most American’s – but has faced criticism that it favours the rich and could add trillions to America’s deficit.
The plan faces an uphill battle in the US Congress with a number of Republican representatives voicing scepticism that it will lead to increased borrowing.
President Trump’s announcement of the plan in Indianapolis yesterday contained few details on how the tax cuts will be paid for.
He called the cuts to corporation tax “revolutionary” adding that “the biggest winners will be middle class workers as jobs start pouring into our country, as companies start competing for American labour, and as wages continue to grow.”
“We want tax reform that is pro-growth, pro-jobs, pro-worker, pro-family and, yes, tax reform that is pro-American,” said the President.
A number of Democrats have already come out against the proposals insisting they will simply increase debt in order to deliver tax cuts to wealthy Americans.
The Republicans have failed to pass any major legislation since President Trump took office in January – despite controlling the White House and both chambers of Congress.
Plans to repeal and replace the “Obamacare” Affordable Care Act once again collapsed in the Senate on Tuesday.