U.S. House of Representatives Republicans want to lower the top individual income tax rate to 33 percent and slash the corporate tax rate, according to a blueprint released on Friday as an agenda for this year's re-election campaign.
The tax reform plan, to be officially unveiled on Friday morning at the U.S. Capitol, is the sixth and final plank of a conservative policy agenda being rolled out by House Speaker Paul Ryan in an effort to unify Republicans after a divisive primary campaign.
Ryan, the country's highest-ranking elected Republican, has described the agenda as a way to offer voters a coherent policy message across key legislative areas for 2017. He has already released segments on poverty, national security, regulation, constitutional authority and healthcare.
Aides describe these issue areas as common ground between Republican presidential candidate Donald Trump and Ryan, who withheld his endorsement of the billionaire businessman until recently.
But Trump's ideas about taxes have appeared contradictory at times. Trump said in May that he is open to raising taxes on the rich, backing off his prior proposals to reduce taxes on all Americans and breaking with Republican presidential nominees who have staunchly opposed tax hikes for almost three decades.
Democrats, including presidential front-runner Hillary Clinton, have pressed for increased taxes on the wealthiest Americans for years.
The House of Representatives Republican tax reform plan would consolidate the current seven tax brackets for individuals to three brackets, and lower the top individual income tax rate to 33 percent from 39.6 percent.
The plan would also create a new business tax rate for small businesses that are organized as sole proprietorships, meaning that small business income would no longer be subject to the top individual tax rate. This would lead to a maximum tax rate of 25 percent on small business income, the blueprint said.
And the plan would 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.
Washington has not been able to summon the political will to reform the loophole-riddled tax code for nearly three decades. Overhauling the tax code has long been a goal of Ryan. He was considered the Republican party's leading voice on taxes and budgets before he ascended to the job of speaker last year.