President Donald Trump and congressional Republicans unveiled Wednesday their plans for tax reform.
The Washington Post reported that Trump and Republican lawmakers released a nine-page document titled, “Unified Framework For Fixing Our Broken Tax Code,” outlining a plan they say will cut taxes on corporations and individuals as well as simplify the tax code.
“With significant and meaningful tax reform and relief, we will create a fairer system that levels the playing field and extends economic opportunities to American workers, small businesses, and middle-income families,” the document stated. “The Trump Administration and Congress will work together to produce tax reform that will put America first.”
What’s in the plan?
- The proposal would nearly double the current standard deduction rates to $24,000 for married taxpayers filing jointly, and $12,000 for individuals.
- It would reduce the current seven income tax brackets to three: 12 percent, 25 percent, and 35 percent. It does not detail what the income level would be for each bracket. The proposal argues that individuals in the current 10 percent bracket “are expected to be better off” under their plan “due to the larger standard deduction, larger child tax credit and additional tax relief that will be included during the committee process.”
- It says the wealthy may be subject to an additional surcharge to make sure the new code “is at least as progressive as the existing tax code and does not shift the tax burden from high-income to lower- and middle-income taxpayers.”
- The plan calls for an increased child tax credit. It also calls for a new tax credit of $500 for non-child dependents such as the sick or the elderly.
- The plan slashes most itemized deductions, but preserves deductions for mortgages and charitable donations.
- It would eliminate the estate tax.
- The plan would cut the corporate tax rate from 35 percent to 20 percent.
What has Trump said about the plan?
In remarks Tuesday at the White House, Trump said the current tax code is “too complicated.”
“So we’re going to make it very, very simple,” Trump said. “It’s called simplification.”