WASHINGTON: US President Donald Trump on Tuesday said a forthcoming tax reform plan would cut taxes "tremendously" for the middle class, as Republican conservatives said they could accept big revenue losses in exchange for aggressive tax cuts for businesses.
As the administration and Republicans in Congress prepared to unveil a tax blueprint on Wednesday, Trump told a bipartisan group of lawmakers from the House of Representatives to expect a "very comprehensive" and "very, very powerful document."
"We will cut taxes tremendously for the middle class - not just a little bit, but tremendously," the president said.
With the latest Republican push to overturn Obamacare sputtering in the Senate, Republicans are under mounting pressure to overhaul the US tax code before year-end.
But up to now, the drive for tax reform has been repeatedly delayed and Wednesday's plan was likely to be light on specifics.
Details of the plan that leaked out over the weekend showed that the corporate income tax rate would be slashed from 35 percent to 20 percent, the rate for "pass-through" businesses from 39.6 percent to 25 percent and the rate for top individual earners from 39.6 percent to 35 percent.
Without offsets such as the closing of lucrative tax loopholes to pay for lower tax rates, the tax cuts would lose about $5 trillion in revenue over a decade, according to the non-partisan Tax Foundation think tank.
Even fiscal hawks are showing a willingness to accept huge revenue losses, predicting aggressive tax cuts would drive economic growth high enough in future years to produce a flood of new tax revenues that would pay for lower rates.
Senate Republicans last week tentatively agreed that tax legislation could lose up to $1.5 trillion over a decade but become revenue neutral thereafter.
On Tuesday the chairman of the conservative House of Representatives Freedom Caucus said he would not support a tax reform plan with a corporate tax rate above 20 percent or a small business rate above 25 percent.