WASHINGTON • President Donald Trump is proposing to slash the corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought into the United States.
With financial markets eagerly anticipating a White House tax plan, Mr Trump will also call for a sharp cut in the top rate on pass-through businesses, including many small business partnerships and sole proprietorships, to 15 per cent from 39.6 per cent, an administration official said on Tuesday.
He will propose cutting the income tax rate paid by public corporations to 15 per cent from 35 per cent, and allowing multinationals to bring in overseas profits at a tax rate of 10 per cent versus 35 per cent now, the official said.
Mr Trump's proposal due to be unveiled yesterday by Treasury Secretary Steve Mnuchin will not include a controversial "border-adjustment" tax on imports that was in earlier proposals floated by Republicans in the House of Representatives as a way to offset revenue losses resulting from tax cuts.
But Mr Trump's tax blueprint will fall short of the kind of comprehensive reform that Republicans have long discussed.
The plan is not expected by analysts to include any proposals for raising new revenue to offset that lost by the tax cuts and so, if enacted, it would potentially add billions of dollars to the federal deficit.
Mr Mnuchin has said the tax cuts will pay for themselves by generating more economic growth but fiscal hawks, potentially some in Mr Trump's own Republican Party, along with Democrats, are bound to question these claims.
Mr Trump was thought to be considering capping the individual top tax rate at 33 per cent, repealing the estate and alternative minimum taxes as well as cutting taxes for the middle class, analysts said.
Provisions that could attract votes from Democrats, such as a proposal to fund infrastructure spending or a childcare tax credit as proposed by his daughter Ivanka, were still the subject of speculation on Tuesday.