The Trump administration on Wednesday announced it is laying out a plan to slash taxes for businesses and individuals by $5 trillion over a decade, making it the largest tax cut in history and likely the largest corporate tax cut since the Reagan tax cuts of 1981.
The new plan would also extend the Bush tax cuts for businesses through 2025, but cut the top rate from 39.6 percent to 35 percent.
The plan will also extend other tax breaks for corporations, as well as some tax breaks that expire in 2019.
The administration announced that the Trump plan will reduce the corporate tax rate from 35 percent to 15 percent over 10 years and to 10 percent over 20 years.
The GOP has been pushing for the massive tax cuts to come after years of underperformance and a sluggish economy that has seen more than 6 million people leave the labor force.
Republicans have called for the Trump administration to enact the plan without a major overhaul of the tax code.
The White House said the plan will include a doubling of the standard deduction, a tax break that has proven popular among middle-class families, and a new credit that would help people pay for the cost of childcare.
The proposal will also include the doubling of child tax credit for parents of children under age 2 and a refundable tax credit of $2,000 for individuals who earn $1 million or more per year.
The tax plan also proposes a reduction in the standard rate from 33.6 to 27.6 per cent for families making more than $400,000 per year and a tax cut for small businesses, up to $3,000.
The nonpartisan Tax Policy Center estimated that the plan would generate $1.2 trillion in tax revenues over the next decade.
The Republican-led House of Representatives has already passed the measure, and Vice President Mike Pence is expected to sign it into law, but Democrats and some congressional Republicans have expressed skepticism about the plan.
The Democratic National Committee, meanwhile, is calling on President Donald Trump to sign the tax plan into law and release details of the plan to the public.
“We need to hear from the White House on what they’re proposing, and they need to answer questions about how this plan would benefit American families, our economy, and our economy-says DNC Press Secretary Brad Woodhouse,” Woodhouse said.
“The White House is pushing this plan, but the president should release details about what it does for the middle class and how this tax plan would actually benefit the middle-income families and businesses it is supposed to help.
If the administration is going to make promises like this, the White house needs to release details on how they are going to pay for it,” Woodson said.