WASHINGTON (Reuters) - Republicans in the U.S. House of Representatives said on Friday they would advance legislation next year to chop individual and corporate U.S. tax rates.
The tax plan, unveiled by House Speaker Paul Ryan and other Republican lawmakers at the U.S. Capitol, is the sixth and final plank of a conservative policy agenda being rolled out in an effort to unify Republicans after a divisive primary campaign for the party’s presidential nominee.
Ryan, the highest-ranking elected Republican, said the proposal would provide a clear direction for U.S. economic leadership and was needed amid global uncertainty that was exemplified by the British vote to leave the European Union.
“For all of these moments of possible uncertainty that are happening around the globe, having strong, powerful, confident, American economic leadership is in need, and this does that,” he said.
Washington has been unable to summon the political will to reform the loophole-riddled tax code for nearly three decades. Overhauling the code has long been a goal of Ryan, a self-described policy wonk. He was considered the Republican Party’s leading voice on taxes and budgets before he ascended to the job of speaker last year.
But the labor powerhouse AFL-CIO scorned the Republican blueprint as similar to a tax-cutting proposal made last year by presumptive Republican presidential nominee Donald Trump, who Ryan recently endorsed.
Ryan and Trump “have striking resemblance - both tax plans benefit the wealthy & corps a lot,” the AFL-CIO said on Twitter.
Trump’s ideas about taxes have appeared contradictory at times. He said in May he is open to raising taxes on the rich, backing off prior proposals to reduce taxes on all Americans and corporations by slashing rates even more deeply than Ryan and House Republicans would.
Democrats, including presidential front-runner Hillary Clinton, have pressed for increased taxes on the wealthiest Americans for years.
House Democratic Leader Nancy Pelosi criticized the Republican plan as “massive tax giveaways to millionaires and billionaires on the backs of hard-working American families.”
The plan would consolidate the current seven tax brackets for individuals to three, and lower the top individual income tax rate from 39.6 percent to 33 percent, higher than the 25 percent that Ryan proposed when he chaired the House Budget Committee.
Ryan said the goal was to make things so simple the average American could do their taxes on a postcard.
The plan would lead to a maximum tax rate of 25 percent on small business income. It would also lower the top U.S. corporate tax rate from 35 percent, the highest in the industrialized world, to 20 percent, as well as shift to a “territorial” style tax system aimed at exempting the earnings of American companies abroad from U.S. taxation.
The blueprint also calls for overhauling the tax-collecting Internal Revenue Service, an idea that animates many conservatives who have called for its abolition.
Reporting by Susan Cornwell; Editing by Susan Heavey and Jeffrey Benkoe