Trump's plan to slash business taxes seen as 'guidepost' by congressional Republicans

State, local tax deduction targeted

For average US taxpayers, Trump proposed help by doubling the standard deductions for individuals who do not itemize; simplifying tax returns by reducing the number of tax brackets to three from seven; and providing unspecified tax relief for families with child and dependent care expenses.

He also called for repealing inheritance taxes on estatesand the alternative minimum tax, both measures that would help a handful of wealthy taxpayers.

Trump's laundry list of tax cuts would reduce revenues forthe US government, which is already running a deficit anddeeply in debt. He offered few proposals to offset those losses.

Democrats and fiscal-hawk Republicans will be concerned about how much Trump's proposals would expand the deficit. To minimize that, Republicans will rely heavily on "dynamic scoring," an economic modeling method that attempts to predict economic growth and new tax revenues resulting from tax cuts.

Mnuchin said the revenue losses would also be offset by killing many tax loopholes. He said at a briefing that Trump's plan would kill most tax deductions, except those for charitable giving, retirement savings and mortgage interest.

Cohn said at the briefing that one deduction on Trump's chopping block is for state and local tax payments, which is estimated to cost the US Treasury $96 billion this year.

Ending it would raise about that much in revenue.

Such a move would hurt high-tax states, which tend to vote Democratic, such as New York and California, where the state and local tax deduction is a major item, said some tax analysts.

Like all of Trump's proposals, this one would face intense scrutiny in Congress.

The No 2 Democrat in the Senate, Dick Durbin, attacked the tax proposal and the fact Trump, a wealthy New York real estate developer, had declined to make public his personal tax returns.

"President Trump should release his own tax returns if he wants to have any credibility in a debate about America's tax code," Durbin said. Mnuchin said on Wednesday that Trump did not intend to release his tax returns.

                                                                                       Reuters