Trump planning 'major tax cut' just before polls

US President Donald Trump, said on Monday his administration planned to produce a resolution within two weeks calling for a 10 per cent tax cut for middle-income people.

WASHINGTON • United States President Donald Trump said he is considering a "major tax cut" for middle-income earners that he may announce just days before crucial midterm elections that will determine control of Congress.

The President did not provide any details about the proposal, which would follow a landmark tax overhaul last year that Republicans had hoped would ensure they would keep control of Congress after the midterms.

The overhaul, which has been criticised for mainly benefiting the wealthy and corporations, has not helped GOP candidates as much as Republicans thought it would. Many forecasters believe Democrats are likely to take the House.

"We're looking at a major tax cut for middle-income people," the President told reporters last Saturday after a rally in Elko, Nevada - part of a three-state swing through the west to bolster support for the Republican House, Senate and gubernatorial candidates.

"Not for business at all; for middle-income people," he said.

Mr Trump's tax overhaul has also been faulted for adding significantly to the government's budget deficit. It is possible that a second round of tax cuts could even face resistance from some Republicans concerned about increasing the deficit even more.

No Democrats backed last year's tax Bill, and they have been critical of plans for a second round of tax cuts since they were first discussed by Republicans.

Unless offset by spending reductions, any new tax cut would add to the deficit, which reached US$779 billion (S$1.1 trillion) in Mr Trump's first full year in office.

Mr Trump said Representative Kevin Brady, chairman of the Ways and Means Committee, and House Speaker Paul Ryan are working on the possible legislation. He added that the plan could be announced as soon as Nov 1.

The midterm elections are on Nov 6.

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A version of this article appeared in the print edition of The Straits Times on October 22, 2018, with the headline 'Trump planning 'major tax cut' just before polls'. Print Edition | Subscribe