(Bloomberg) -- President Donald Trump and Republicanleaders launched an urgent effort to get a major legislative winthis year, announcing a long-awaited tax plan that will immediately set off a fightover how much top earners should pay.

The framework proposes cutting the top individual rate to 35percent -- but leaves it up to Congress to decide whether tocreate a higher bracket for those at the top of the income scale,according to the document released Wednesday.

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The rate on corporations would be set at 20 percent, down fromthe current 35 percent, and businesses would be allowed toimmediately write off their capital spending for at least fiveyears. Pass-through businesses would have their tax rate capped at25 percent.

U.S. stocks pushed toward all-time highs, with a Goldman Sachsbasket of companies that pay the highest tax rates pacing gains.The group added 0.5 percent at 10:20 a.m. in New York, poised tooutperform the broader market for a sixth straight day.

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The plan sets out three tax brackets for individuals -- 12percent, 25 percent and 35 percent, down from the existing sevenrates, which top out at 39.6 percent.

But that’s not firmly set, as congressional tax-writingcommittees will be given flexibility to add a fourth rate for thehighest earners -- an effort to prevent the overhaul from providingtoo much of a benefit for the wealthy.

Lawmakers haven’t signaled that they’ll take that option. KeyRepublicans on the tax-writing Ways and Means Committee, includingChairman Kevin Brady, have said they’re committed to offeringacross-the-board tax relief. Trump has repeatedly said he’sfocusing on middle-class individuals.

At the same time, though, the tax plan calls for repealing thealternative minimum tax, the estate tax and the generation-skippingestate tax, all of which would be a boon for higher earners and thewealthy.

“The last thing we should be doing right now is providinghundreds of billions in tax breaks to the wealthiest people andmost profitable corporations in this country,” Senator BernieSanders, a Vermont independent who caucuses with the Democrats,said in an emailed statement. “It is particularly obscene to repealthe estate tax that would provide a $269 billion tax break to thetop 0.2 percent.”

The release of the plan -- which Trump will tout Wednesdayduring a speech in Indiana -- is the result of a months-longprocess to craft a tax overhaul that was a key promise in Trump’scampaign.

But it marks only the start of what could be a brutal fight inCongress among lawmakers who disagree on key elements of theframework.

One influential skeptic has been Senate Finance CommitteeChairman Orrin Hatch, a Utah Republican, who pledged his committeewould not be a “rubber stamp” for the plan.

Other Republicans cheered the plan. “At first glance, thepolicies released today are good news to the American people,”Representative Mark Walker of North Carolina, chairman of a largeconservative caucus, said in statement. “We need to begin acting onthis framework legislatively as soon as possible.”

Trump selected Indiana for the speech because of themanufacturing resurgence experienced during the tenure of VicePresident Mike Pence, who served as the state’s governor before hiselection last year.

Democrats have attributed increases in manufacturing to recoveryprograms championed by former President Barack Obama. The speech isexpected to include references to Indiana citizens who believe theywould benefit from the proposed changes to the tax code.

The tax effort begins one day after Senate leaders decided notto move forward with a vote on repealing Obamacare, one of the mostcentral promises of Trump’s presidential campaign.

But Trump has said that tax legislation -- which he callsessential for stimulating economic growth -- has been his mainfocus.

Trump has told others that he expects lawmakers to work at abrisk pace. If not, he and the Republican Congress would end 2017without a single major legislative victory.

International plans

On the international side, the plan would move toward a“territorial” approach that would scale back the U.S.’s uniqueworldwide approach to taxing corporate profits regardless of wherethey’re earned.

But it includes “rules to protect the U.S. tax base by taxing ata reduced rate and on a global basis the foreign profits of U.S.multinational corporations.” The amount of that reduced rate isn’tspecified.

Companies with accumulated offshore profits would be subject toa one-time tax on those earnings -- clearing the way for thatincome to return to the U.S.

The rates that would be applied are unclear, but there would bea higher rate for income held in cash compared to the rate for lessliquid investments. Firms would be able to pay the new tax overseveral years.

Under current law, companies can defer paying U.S. tax on theiroffshore earnings until they bring them to the U.S. As a result,U.S. firms have stockpiled an estimated $2.6 trillion in profitoffshore.

So-called pass-through entities, which include partnerships andlimited liability companies, would see their rate capped at 25percent.

Currently, those businesses -- which can range from mom-and-popgrocers to hedge funds -- don’t pay income tax themselves but passtheir earnings through to their owners, who then pay tax based ontheir individual rates.

While the pass-through rate cut would represent a major taxbreak for lucrative pass-throughs, tax-writers would craft measuresaimed at preventing individuals from recharacterizing theirpersonal wages as business income.

Middle-class benefits

In terms of middle-class benefits, the framework outlines a neardoubling of the standard deduction -- to $12,000 for individualsand $24,000 for married couples -- and calls for “significantlyincreasing” the child tax credit from the current $1,000 per childunder 17. It would also expand eligibility to include moreupper-middle class parents.

The tax plan still lacks extensive details about ways to offsetits rate cuts with additional revenue. It says most itemizeddeductions for individuals should be eliminated, without providingspecifics -- while calling for mortgage interest and charitablegiving deductions to be preserved. The tax exemption formunicipal bonds would also be retained.

However, the state and local tax deduction would be abolished.Ending that break, which tends to benefit high-income filers inDemocratic states, would raise an estimated $1.3 trillion over adecade. The move faces some Republican headwinds from lawmakers indistricts that use the deduction heavily.

The plan would also limit the interest deduction companies cantake on their borrowing, but no additional details wereprovided. Congress’s tax-writing committees will be tasked withlimiting other business credits to help generate additionalrevenue.

Seeking offsets

House leaders have proposed abolishing the corporate interestdeduction, a move opposed by debt-reliant industries like privateequity and commercial real estate. Senate leaders, including Hatchand John Thune of South Dakota, the chamber’s No. 3 Republican,have said they want to maintain the deduction at some level atleast.

The lack of consensus on how to offset tax cuts -- aprerequisite to making them permanent under the procedure thatSenate leaders plan to use to pass the legislation -- poseshurdles. If they fail to raise enough money to avoid a long-termhit to the deficit, at least part of the package would have toexpire within a decade under current rules.

But as tax writers surface ideas to raise revenue by closingloopholes or ending specific tax breaks, they’ll unleash a torrentof lobbying similar to the campaign that killed a proposedborder-adjusted tax earlier this year.

“We’re already working on it,” said Carlos Curbelo, a member ofthe Ways and Means panel, in reference to finding offsets.

“There are a number of pay-fors out there that are not justpay-fors, but also good elements of tax reform that will level theplaying field across the economy and lead to greater growth,” saidCurbelo, a Florida Republican. He said the committee’s goal is tomake the tax changes as permanent as possible.

“So we’re in search of it and we’re getting close, very close,”he said.

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