World News

Trump proposes U.S. tax overhaul, stirs concerns on deficit

WASHINGTON, (Reuters) - President Donald Trump proposed yesterday the biggest U.S. tax overhaul in three decades, calling for tax cuts for most Americans, but prompting criticism that the plan favors business and the rich and could add trillions of dollars to the deficit.

The proposal drew a swift, skeptical response from Senator Bob Corker, a leading Republican “fiscal hawk,” who vowed not to vote for any federal tax package financed with borrowed money.

“What I can tell you is that I’m not about to vote for any bill that increases our deficit, period,” Corker, who said on Tuesday he would not seek re-election in 2018, told reporters.

Trump said his tax plan was aimed at helping working people, creating jobs and making the tax code simpler and fairer. But it faces an uphill battle in the U.S. Congress with Trump’s own Republican Party divided over it and Democrats hostile.

The plan would lower corporate and small-business income tax rates, reduce the top income tax rate for high-earning American individuals and scrap some popular tax breaks, including one that benefits people in high-tax states dominated by Democrats.

Forged during months of talks among Trump’s aides and top congressional Republicans, the plan contained few details on how to pay for the tax cuts without expanding the budget deficit and adding to the nation’s $20 trillion national debt.

The plan still must be turned into legislation, which was not expected until after Congress makes progress on the fiscal 2018 budget, perhaps in October. It must then be debated by the Republican-led congressional tax-writing committees.

Analysts were skeptical that Congress could approve a tax bill this year, but that is what Republicans hope to achieve so they can enter next year’s congressional election campaigns with at least one legislative achievement to show for 2017.

Financial markets rallied on the plan’s unveiling, an event long anticipated by traders betting that stocks would benefit from both faster economic growth and inflation.

At an event in Indianapolis, Trump called the plan the largest tax cut in U.S. history. “We want tax reform that is pro-growth, pro-jobs, proworker, pro-family and, yes, tax reform that is pro-American,” he said.

The real estate mogul-turnedpolitician, who promised big tax cuts as a candidate, told reporters he personally would not gain financially from the proposal.

“I think there’s very little benefit for people of wealth,” said Trump, who unlike many of his White House predecessors, has refused to make public his own tax returns.

Republicans have produced no major legislative successes since Trump took office in January, even though they control the White House and both chambers of Congress. Their top legislative priority, overhauling the U.S. healthcare system, collapsed again in the Senate on Tuesday.

A comprehensive rewrite of the U.S. tax code has eluded previous