US President Donald Trump unveiled plans to dramatically cut taxes for US businesses and individuals, slashing the corporate rate to 15 percent, but the once-in-a-generation overhaul is headed for a tough fight in Congress.

Trump proposed on Wednesday slashing tax rates for businesses and on overseas corporate profits returned to the country, in a plan that his fellow Republicans in Congress generally welcomed but viewed as an opening gambit.

"Under the Trump plan, we will have a massive tax cut for businesses and massive tax reform and simplification," US Treasury Secretary Steven Mnuchin announced from the White House.

Corporate tax rates would be more than halved from the current 35 percent, and tax brackets for individuals would be compressed from seven to just three - 10, 25 and 35 percent.

Gary Cohn, Trump's chief economic adviser, who unveiled the plan alongside Mnuchin, dubbed it "the most significant tax reform legislation since 1986, and one of the biggest tax cuts in American history".

But the long-anticipated overhaul - the details of which remain unclear beyond headline measures - could face stiff opposition in Congress, including from some Republicans, with politicians sharply divided over the prospect of fuelling already rising deficits.

"This isn't going to be easy. Doing big things never is," Cohn said. "We will be attacked from the left and we will be attacked from the right. But one thing is certain: I would never ever bet against this president."

Following the announcement, Wall Street stocks finished slightly lower. The Dow Jones Industrial Average lost 0.1 percent to end the session at 20,975.09.

The broad-based S&P 500 also slipped 0.1 percent to end at 2,387.45, while the tech-rich Nasdaq Composite Index finished at 6,025.23, dipping slightly from Tuesday's record when it closed above 6,000 for the first time.

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Slashing taxes on income and business was a key part of Trump's election platform.

Mnuchin declined to set a deadline for the reform passing Congress, but he said the administration was "determined to move this as fast as we can and get this done this year".

A key element is the repatriation of corporate profits from overseas.

"We will have a one-time tax on overseas profits which will bring back trillions of dollars that are offshore to be invested here in the US," Mnuchin said.

'Explode the deficit'

Democrats sounded an immediate warning.

"If the president's plan is to give a massive tax break to the very wealthy in this country, a plan that will mostly benefit people and businesses like President Trump's, that won't pass muster with we Democrats," Minority Leader Chuck Schumer said.

He also warned that a plan that dramatically shrinks tax revenues would "explode the deficit".

Analysts have said cutting the top marginal corporate tax rate by 20 percentage points could add a whopping $2 trillion or more to the deficit over a decade.