President Donald's Trump's tax plan slashes rates on businesses and the wealthy but offers few details on how to pay for the cuts without driving up the deficit. Fred Katayama reports.
President Donald Trump's proposed the biggest tax overhaul in three decades. He's slashing tax rates on businesses and the rich. He proposes to cut corporate income taxes to 20 percent from 35 percent. And for small business owners, who are now taxed at the individual income tax rates, a new pass-through tax of 25 percent. The top tax rate for individuals will be reduced to 35 percent from nearly 40 percent, and the plan would roughly double the standard deduction for all taxpayers. But it offers few details on how to pay for the cuts without driving the federal deficit higher. Critics say it falls short of the tax reform Trump had promised on the campaign trail. He had called for a cut in the corporate rate to 15 percent. Wall Street opened higher partly on hopes for Trump's tax plan, which comes one day after the Republicans' top legislative priority, the healthcare bill, collapsed in the Senate. UBS' Evan Brown says the markets have underpriced the likelihood that the tax legislation would pass. SOUNDBITE: EVAN BROWN, DIRECTOR OF ASSET ALLOCATION, UBS, (ENGLISH) SAYING: "I think a lot of the market they were interpreting earlier this year the failure of healthcare legislation as a sign that Washington couldn't get anything done. But in contrast, we actually tink that this strenghtens the incentives. It strengthens the motivaton for Republicans to come together and get it right on tax reform." Trump badly needs a win. He hasn't had any major legislative successes even though his Republican party controls both chambers of Congress.