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Donald Trump proposes ‘biggest ever’ tax cuts

Donald Trump has hinted he could withdraw from the Paris Agreement.

Donald Trump has hinted he could withdraw from the Paris Agreement. Photo: Getty

US President Donald Trump has proposed slashing the US tax rate for businesses and overseas corporate profits in what is being described as the “biggest tax cut” in its history.

Mr Trump proposed cutting the corporate and pass-through business profits tax rate to 15 per cent from 35 per cent or more, as well as offering tax cuts to average Americans in a rough outline of his tax policy goals.

Treasury Secretary Steven Mnuchin has outlined Trump’s overhaul plan in a press briefing at the White House, describing it as “the most significant tax reform legislation since 1986 and one of the biggest tax cuts in American history.”

Mnuchin added that the plan would enable the United States economy to grow at an annual clip of three per cent or more.

Mr Mnuchin called the proposals “core principles” that would be worked on with Congress to produce a bill that can be passed.

He said the plan would pay for itself through economic growth, and by reducing tax deductions and closing loopholes.

“Our objective is to make US businesses the most competitive in the world,” he said.

“The President is determined to unleash economic growth for businesses.”

While public corporations’ profits or losses are taxed directly, pass-through businesses are taxed under the individual income tax code.

Mr Mnuchin also said Mr Trump was proposing that corporations bring off-shore profits into the country at a rate well below the current 35 per cent rate.

He did not say what that rate would be, but insisted the administration was working with Congress on a low rate.

It’s estimated about $2.6 trillion in profits are being held tax-exempt by abroad US multinationals, under a rule that says they are only taxable if brought into the US.

“The overall economic plan consists of massive tax cuts and tax reform, regulatory relief and renegotiating trade deals, and with that we will unlock the economic growth that’s been held back for too long in this country,” Mr Mnuchin said.

Trump has said tax reform is one of the main priorities of his first year in office, although his plan will have to be converted into a bill that is approved by the Republican-controlled Congress, where sharp opposition can be expected from both the GOP and Democrats.

Some Republicans say the plan would cause a further sharp rise in the national debt, while Democrats say it would benefit the wealthy.

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