U.S. President Donald Trump will release a tax plan on Wednesday proposing some deep rate cuts, mostly for businesses, including a slashed corporate income tax rate and steeply discounted tax rate for overseas corporate profits brought into the United States, officials said.
Trump intends for his broad blueprint, which will fall short of the kind of comprehensive tax reform that Republicans have long discussed, to be a guidepost for lawmakers in the U.S. House of Representatives and Senate.
"We're driving this a little bit more," a senior White House official told a group of reporters late on Tuesday.
The plan is not expected by analysts to include any proposals for raising new revenue, potentially adding billions of dollars to the federal deficit.
Treasury Secretary Steve Mnuchin has been leading the Trump administration's effort to craft a tax package that can win support in Congress.
Though the U.S. House of Representatives and Senate are both controlled by the Republican Party, some aspects of Trump's proposals could be a difficult sell, including to some fiscal hawks in his own party. Trump's plan will cut the income tax rate paid by public corporations to 15 % from 35 % and sharply cut the top tax rate by pass-through businesses, including many small business partnerships and sole proprietorships, to 15 % from 39.6 %, an official said.
Trump will also propose a repatriation tax on offshore earnings along the lines of his campaign proposal for a 10 % levy, versus the 35 % due on repatriated foreign profits under present law, the official said.
Trump's proposal will not include a controversial "border-adjustment" tax on imports that was in earlier proposals floated by House Republicans as a way to offset revenue losses resulting from tax cuts.
Mnuchin has said the cuts will pay for themselves by generating more economic growth, but fiscal hawks, potentially some in Trump’s own Republican Party, along with Democrats are certain to question these claims.
Whether Trump will include provisions that could attract Democratic votes, such as a proposal to fund infrastructure spending or a child-care tax credit as proposed by his daughter Ivanka, is still the subject of speculation.
The senior white house official said Trump would like to see Congress pass tax reform by the middle of autumn.
The last overhaul of the U.S. tax code was in 1986 during the administration of former President Ronald Reagan, a Republican.