The plan envisages a repeal of many safe-guard laws whose provisions increase the compliance cost for big businesses.
In a first step towards U.S. tax reforms, the U.S. House of Representatives has released budgetary proposals for the fiscal year 2018 that includes a plan to allow a tax reform package to pass through the U.S. Congress without requiring the support of Democrats.
The $4 trillion blueprint will however have to be approved by both the House and the Senate.
The plan sets the stage for a repeal of the 2010 Dodd-Frank Wall Street reform law as well as removing government funding from mandatory federal programs, including food stamps, over the next decade which is likely to result in $203 billion in savings.
The plan envisages a significant boost in U.S. fiscal position which is set to rise from a 2018 deficit of $472 billion to a $9 billion budget surplus in 2027. This reversal is partly based on the assumption that the U.S. economy will grow by 2.6% every year as well as future deregulations in financial laws, taxes, and healthcare.
In contrast, the nonpartisan Congressional Budget Office has set 1.9% as the growth rate of the U.S. economy from 2017 to 2027.
The House Representative plan for 2018, includes a defence spending of $621.5 billion in 2018 and $511 billion on non-defence discretionary spending.
The House Budget Committee is expected to approve the plan later this week, after which it will be send to the floor of the chamber for a full vote.
Its passage however may not be as smooth as envisaged since already many conservative lawmakers are balking over mandatory cuts, which they think are too small; they want to see a tax reform plan before supporting the measure.