Credit Doug Mills/The New York Times
WASHINGTON — President Trump will propose an aggressive and expensive rewrite of the federal tax code on Wednesday that would reduce rates for companies and individuals, and curb some deductions, while leaving unanswered the volatile question of whether the wealthiest will see their tax bills swell or shrink.
Mr. Trump will unveil his proposal — more a framework for congressional action than a prescriptive demand — five months after releasing a one-page summary of a plan he promised would be the most sweeping tax reform in a generation.
The centerpiece of the proposal is a reduction in corporate tax rates to 20 percent, from 35 percent. The move has been long urged by business groups and banks, championed by National Economic Council Director Gary D. Cohn and opposed by many Democrats who see it as an expensive giveaway to corporate America. It would also create a new 25 percent rate for “pass-through” businesses, which are currently taxed at individual income rates.
That would be coupled with an overall reduction in taxes paid by individuals and families paying the lowest rates. The cut would be achieved by doubling the standard deduction and slightly increasing the bottom-rung tax rate to 12 percent, from 10 percent, according to two officials briefed on the details of the blueprint.
There is less certainty on what to do for individuals and families at the top of the scale. Mr. Cohn and Treasury Secretary Steven Mnuchin, who have been working on the plan for months, decided to leave some of the details to Congress.
The White House is attempting to navigate a narrow political path on an issue that administration officials believe can reboot Mr. Trump’s presidency. It is an attempt to assuage the demand for lower taxes among wealthy party donors without being perceived by Mr. Trump’s working-class base as giving a windfall to the rich.
The framework, which has been agreed upon by Republican leaders in the House and Senate, supports a reduction in the individual rate to 35 percent, from 39.6 percent. It also leaves the door open for an additional and unspecified higher income bracket for the wealthiest Americans.
Source: New York Times