Trump administration proposes corporate tax cuts of 20%

(c) Sky News 2017: <a href="">Trump administration proposes corporate tax cuts of 20%</a>

US President Donald Trump’s administration has unveiled plans for a drastic overhaul of the country’s tax system, including reducing corporate tax to 15%.

Treasury secretary Stephen Mnuchin presented the plan to the media on Wednesday and said that a drop in rates for American corporations would boost economic growth and bring jobs back to the country.

The reduction to 15% from the US's current level of 35% would give the United States one of the lowest corporate tax rates among Western democracies - the UK's corporation tax is currently set at 20%.

But President Trump will not be able to make tax changes himself as all such decisions must be approved by Congress. He is likely to face outspoken criticism from Democrats in both Houses thanks to his continued refusal to release his own tax paperwork.

Mr Mnuchin and Gary Cohn, director of the White House National Economic Council, were short on details about how much the cuts would cost the federal government, but said the economic benefits of such a move would mean the costs of the plan would be reduced or even eliminated.

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Some economists however have already suggested the plans could add trillions to the national deficit over the next decade if they are implemented as proposed.

Also outlined by Mr Mnuchin was an intention to cut the number of income tax brackets for ordinary Americans from seven to three - meaning everyone will pay either 10%, 25% or 35% on what they earn - and to eliminate inheritance taxes, leading to accusations that the reforms would merely amount to tax relief for the rich.

The markets were largely unmoved by the plan, with much of it heavily trailed in the media and therefore already priced in by analysts.

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