US Republican leaders launched their plan for the largest tax overhaul since Ronald Reagan's presidency in the 1980s, promising a $1,182 cut for average families, and slashing corporation tax in a bid to boost the economy of the world's only superpower.

It represented a concerted Republican attempt to achieve a first major legislative goal under the presidency of Donald Trump after failing to repeal Obamacare, the signature domestic policy legacy of Barack Obama.

Mr Trump and Republicans in Congress had been hoping to achieve three major "wins" - Obamacare repeal, major infrastructure investment, and tax reform - in his first year in the White House, but tax reform is now the only one with a chance of being secured.

In line with campaign pledges made by Mr Trump the Tax Cuts and Jobs Act - which he referred to as the "Cut Cut Cut Act" - proposed reducing tax paid by companies from 35 per cent to 20 per cent.

It would also create a new 10 per cent tax on US companies' high-profit foreign subsidiaries, discouraging them from moving profits abroad.

An average middle class family of four with a $60,000 income would receive an estimated tax cut of $1,182, about enough to fill up their car with petrol for a year or pay their phone bill, Republican leaders promised.