President Donald Trump on Friday pledged that the Republican tax proposal would spur "the rebirth of American industry" and supercharge the U.S. economy amid debate over how much growth the plan will generate and its impact on the federal deficit.
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"This huge tax cut will be rocket fuel for our economy," said Mr. Trump in a speech at the National Association of Manufacturers. Under his administration, he said, "the era of economic surrender is over."
Mr. Trump and Republican leaders this week unveiled a proposal that would sharply reduce tax rates on businesses and many individuals, kicking off a major legislative push to overhaul the nation's tax code this year.
"At the center of that plan is a giant, beautiful, massive, the biggest ever in our country, tax cut," Mr. Trump said.
Analysts and economists have disagreed over how much economic growth the tax cuts would likely generate, with many saying there is no clear evidence that cuts typically generate enough growth to offset the drop in revenue from the lower rates.
Treasury Secretary Steven Mnuchin said Thursday that the tax overhaul would generate more than enough economic growth to offset the cost. Mr. Mnuchin said he expects the plan would boost gross domestic product growth to an annual rate of 2.9% over the next 10 years, generating an additional $2 trillion of revenue.
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The ambitious framework released Wednesday sketched out a range of tax changes -- including lower taxes on corporate profits, incentives for business investment, fewer and lower individual income tax brackets and the end of estate taxes -- that Republicans said will boost economic growth and benefit middle-income families.
The nonpartisan Committee for a Responsible Federal Budget estimated the tax framework represents a net tax-cut of $2.2 trillion over a decade.
However, Republicans are now debating scaling back one of their largest proposals to pay for lower tax rates: repeal of the individual deduction for state and local taxes. The fight over the deduction, with more than $1 trillion at stake over a decade, is an early signal of the bruising battle ahead for Republicans trying to pass a tax bill that hasn't garnered Democratic support and that faces narrow GOP margins in the House and Senate.
Mr. Trump and Vice President Mike Pence have promoted the tax proposal -- passage of which would mark the administration's first major legislative victory -- in multiple states in recent days. Mr. Trump traveled to Indiana on Wednesday to outline the tax changes, and Mr. Pence visited Michigan and Wisconsin.
Mr. Trump also touted his administration's effort to reduce regulations, saying he was "cutting regulations at a pace that has never even been thought of before." He said too many regulations hamstring companies' "ability to compete," though he acknowledged some regulations are necessary.
"We want beautiful, fast, efficient regulation that works," he said.
Richard Rubin and Kate Davidson contributed to this article.
Write to Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com
(END) Dow Jones Newswires
September 29, 2017 12:58 ET (16:58 GMT)