Trump hails reform

President pushes sweeping change that would cut top taxes

US PRESIDENT Donald Trump has released a sweeping plan to cut taxes and simplify the tax code, calling it a “once-in-a-generation opportunity”.

President Trump, smarting from another failed attempt at dismantling Obamacare, unveiled his reform package alongside Vice-President Mike Pence on Wednesday.

“This is a revolutionary change, and 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,” Mr Trump told hundreds of supporters at the Indiana State Fair Grounds.

“This will be the lowest top marginal income tax rate for small and midsize businesses in more than 80 years.”

He added: “This is a oncein-a-generation opportunity, and I guess it’s probably something I could say that I’m very good at. I’ve been waiting for this for a long time. We’re going to cut taxes for the middle class, make the tax code simpler and more fair for everyday Americans.”

President Trump’s new tax plan will eliminate the deduction for state and local taxes, despite fierce opposition from high-tax states. The repeal would remove state and local income and property taxes as deductions on federal returns, The New York Post reports.

The perk – first enacted with the income tax in 1913 – is most heavily used in coastal, Democratic states that include New York, California, New Jersey and Connecticut.

Repealing it would increase federal revenue by $US1.3 trillion ($1.89 trillion) over the decade, according to the Tax Policy Centre.

They’ve agreed on the framework for the tax overhaul, while committees will have some flexibility to fill in the details.

Tax brackets will be whittled down to just three: 12, 25 and 35 per cent, with room to add a fourth higher rate if necessary to ensure the wealthy pay their fair share.

But the income levels for the brackets will be decided by the congressional committees.

The top tax rate now is 39.6 per cent. White House officials said rates will be so much lower and the standard deduction so much higher that average Americans won’t miss the state and local tax deduction.

Households making more than $US100,000 ($126,000) benefit the most.