US economy ready to rock after tax cut bill, says Donald Trump

Donald Trump has defended his Republican tax cut as a good deal for the middle class while boldly suggesting it could lead to explosive economic growth for the US.

The legislation, which the Republicans aim to muscle through Congress next week, would lower taxes for the richest Americans.

Benefits for most other taxpayers would be smaller, but the president attempted to sell the bill as a "Christmas present" for middle-class Americans in part because it would trigger job growth.

"It'll be fantastic for the middle-income people and for jobs, most of all," Mr Trump told reporters on the White House lawn before travelling to Camp David for the weekend.

"And I will say that because of what we've done with regulation and other things our economy is doing fantastically well, but it has another big step to go and it can't take that step unless we do the tax bill."

He also predicted the legislation would cause the economy to soar beyond its current 3% rate of growth.

"I think we could go to 4, 5 or even 6%, ultimately. We are back. We are really going to start to rock."

Many economists believe that attaining consistent 4% or 5% annual growth would be challenging. The nation last topped 5% in 1984.

The Republican plan is the widest-ranging reshaping of the tax code in three decades and is expected to add to the nation's 20 trillion dollar debt. The tax cuts are projected to add 1.46 trillion dollars over a decade.

Under the bill, today's 35% rate on corporations would fall to 21%, the crown jewel of the measure for many Republicans.

Mr Trump and Republican leaders had set 20% as their goal but added a point to free money for other tax cuts that won over wavering lawmakers in final talks.

"This is happening. Tax reform under Republican control of Washington is happening," House Speaker Paul Ryan told rank-and-file members in a conference call on Friday. "Most critics out there didn't think it could happen. And now we're on the doorstep of something truly historic."

The bill would repeal an important part of Barack Obama's Affordable Care Act - the requirement that all Americans have health insurance or face a penalty - as the Republicans look to unravel a law it failed to repeal and replace this summer.

It came together as Republicans cemented the needed support for the overhaul, securing endorsements from wavering senators.

Marco Rubio of Florida relented in his high-profile opposition after negotiators expanded the tax credit that parents can claim for their children. He said he would vote for the measure next week.

Bob Corker of Tennessee, the only Republican to vote against the Senate version earlier this month, made the surprise announcement that he would back the legislation.

Mr Corker, chairman of the Senate Foreign Relations Committee, has repeatedly warned that the nation's growing debt is the most serious threat to national security.

"I realise this is a bet on our country's enterprising spirit, and that is a bet I am willing to make," he said.

The bill embodies a long-standing Republican philosophy that a substantial tax break for businesses will trigger economic growth and job creation for Americans in a trickle-down economy.

Sceptical Democrats are likely to oppose the legislation unanimously.

"Under this bill, the working class, middle class and upper middle class get skewered while the rich and wealthy corporations make out like bandits," said Senate Minority Leader Chuck Schumer.

"It is just the opposite of what America needs, and Republicans will rue the day they pass this."

AP


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