On Wednesday, US President Donald Trump proposed one of the biggest tax overhauls in the country in over three decades. The proposed tax structure aims to cut taxes for most Americans, but the new system is also being criticized to favor the rich and can add trillions of dollars to the deficit. Senator, Bob Corker gave a quick response to the proposal and said that he would not vote on any federal tax package that was being financed by borrowed money.
President Trump during the announcement said that the new tax plan would help the working class and create more jobs. He also added that it would make taxes much simpler and fairer. The proposal will face a battle in the US Congress from the Republicans and the Democrats as well. According to the new plan, it would lower the tax rates for corporate and small business owners. It will also reduce the tax liability for high earning American individuals and also eliminate tax breaks. The plan, however, provided little details about how the tax cut will increase the budget deficit and add more to the $20 trillion national debt. The new plan will have to be debated by the Republican led congressional tax writing committee. Even though experts are skeptical if the new tax bill will be approved this year Republicans are hopeful that they can achieve it so that they have at least one legislative achievement to show in 2017.
Donald Trump was attending an event in Indianapolis and he called the new tax plan one of the largest tax cuts that American history has ever seen. He also added that the new tax plan is not just for the rich and would not benefit people with wealth. Republicans have so far made no success in the legislation even though they control both the White House and both chambers of Congress. Their effort to overhaul the healthcare system ended in the Senate on Tuesday.
According to the new tax system, middle class families will have to pay less tax on their income. An individual earning $12,000 and married couples earning $24,000 would not have to pay any tax. Even the corporate income tax would be lowered to 20 percent from the current 35 percent. Even though the tax rates are high globally, most companies pay far less taking advantage of many loopholes and tax breaks. All the small and private businesses will be subject to a 25 percent tax rate which will be a major advantage for small business owners.