The US President’s administration is ramping up its crackdown on the business community, targeting an array of industries including oil and gas exploration, financial services and mining.
The administration’s proposed budget would slash the Federal Reserve’s balance sheet by $300bn and cut its workforce by about 5,000 by 2021, the White House said on Tuesday.
It would also slash corporate tax rates and slash the corporate rate from 35 per cent to 20 per cent.
The budget proposes a doubling of the corporate tax rate to 20.5 per cent, from the current 20.1 per cent rate.
“In order to ensure that every American family can have access to the most generous tax policies available, the President has proposed eliminating the current marginal tax rate for corporations of 35 per a share and eliminating a 2 per cent top rate for individuals,” the budget said.
The proposed cuts are expected to take effect from 1 April, with a 2.9 per cent cut to the standard deduction and a 1.9 percent cut to mortgage interest.
The cuts would apply to corporations of at least $50bn, with the largest cuts to the largest US companies, such as Exxon Mobil Corp and ConocoPhillips Corp, the budget says.
The tax cuts are the first of many Trump administration policies that will affect the country’s finances, as the President’s budget seeks to roll back the effects of a healthcare bill passed by the Senate and signed into law by the President earlier this month.
In the budget, the US Treasury proposed slashing its corporate tax base by $600bn over the next decade, including $300 billion from 2025 to 2026, and eliminating deductions and credits for many deductions.
“These budget reductions would result in an overall net tax cut of approximately $1.3 trillion over the decade,” the Treasury said.
“The Budget also proposes a significant reduction in the US corporate tax system and increases the rate on capital gains, dividends, interest and capital gains taxes.
These changes will result in a reduction in corporate tax revenues of approximately 2.4 percentage points over the ten-year period.”
The budget also seeks to eliminate the Affordable Care Act’s individual mandate, which requires most Americans to have health insurance, while proposing a $10bn “health savings account” that could be used for prescription drugs.
It also seeks a new Medicare prescription drug benefit, which would increase payments to physicians.
The US economy grew by 3.3 per cent in 2016, but that figure is forecast to be a measly 0.5 percentage points higher this year.
The Trump administration has repeatedly said the healthcare bill will create millions of jobs.
On Tuesday, the Congressional Budget Office said that Trump’s healthcare plan would cost the US economy $1tn by 2026.
US stocks fell by nearly 5 per cent on the news.
The Dow Jones Industrial Average shed almost 6 per cent and the S&P 500 dropped about 3 per cent following the budget.