Top White House officials say Donald Trump will deliver the "biggest tax cuts" in US history as they unveiled the president's highly-anticipated tax plans.
Some of the details had been leaked before yesterday's announcement but the key features of the proposal are:
- Reducing the number of income tax brackets from seven to three with a top tax rate of 35 percent and lower rates of 25 and 10 percent. The officials did not reveal at what level of income the brackets would kick in.
- A cut in the corporate tax rate from 35 to 15 percent.
- The elimination of almost all tax deductions, with just a few exceptions including interest on a mortgage and charitable donations.
- Treasury Secretary Steve Mnuchin said there would be a one-off tax rate for US companies to bring home cash they have overseas but did not reveal what the rate would be, saying the White House was consulting Congress on the matter.
- A repeal of the alternative minimum tax (AMT), which is a supplemental income tax paid by some corporations and individuals which have exemptions that allow for lower payments of standard income tax. The tax cost Mr Trump $31 million, according to his 2005 tax return. Without the AMT Mr Trump would have paid just $5.3 million in income tax on his income of $150 million.
Commentators have said the tax plan will dramatically increase to the United States' deficit because there are no new taxes or levies to cover the billions in lost revenue that will come from slashing taxes.
Secretary Mnuchin did not deny the claim, refusing to respond to questions on whether the tax plan would be "revenue neutral".
He had earlier said that the tax plan would pay for itself through the economic growth it would spur but a number of economists have also questioned this claim.