Republican Tax Reform Framework
- Author: Leroy Wright Sep 28, 2017,
Sep 28, 2017, 17:27
Speaking at an event in Indianapolis, Trump called the plan the largest tax cut in USA history and "historic tax relief to the American people".
President Trump is delivering a speech in IN on Wednesday where he will describe his proposal to reform the American tax system.
The New York Times reports the proposed framework reduces the corporate tax rate to 20%, doubles deductions for married and single filers to $24,000 and $12,000 respectively, and reduces the number of tax brackets from seven to three.
The plan would likely cut the tax rate for the wealthiest Americans, now at 39.6 percent, to 35 percent, people familiar with the plan say. "This will be the lowest top margin income tax rate for small and midsize businesses in more than 80 years".
"Too many in our country are shut out of the dynamism of the US economy, which has led to the justifiable feeling that the system is rigged against hardworking Americans", reads the opening of the plan. The president's plan only has three brackets with rates at 12%, 25% and 35%.
The new plan doesn't list the income brackets for the new rates.
None of this is set in stone yet.
The effort is further complicated by a GOP divided between fiscal "hawks" who want any tax cuts paid for by closing tax breaks to raise revenue and "supply-siders" who believe tax cuts will eventually pay for themselves by spurring economic growth. Another senior administration official said Trump will discuss the elimination of some loopholes in the code when he speaks in Indianapolis.
Opposition Democrats savaged the reform proposal as a "perverse" system for rewarding the wealthy, and called out Trump for failing to help working and middle-class American families.
More than 7 in 10 adults say the tax system already tends to favor the wealthy more than the middle class, with a 55 percent majority who feel this "strongly".
Trump told reporters as he departed Washington for IN that a 20 percent corporate tax rate was his "red line" and not negotiable.
Republicans released their tax reform blueprint on Wednesday that seeks to cut taxes on middle-class families and Americans businesses. The taxpayer would be able to claim them as a dependent. High corporate tax rates reduce capital investment, and that ultimately suppresses wages and opportunities for US workers.
The new tax plan was hammered during months of negotiations between Treasury Secretary Steven Mnuchin, National Economic Director Gary Cohn and top Republicans in the House and Senate, a group known as the "Big Six". Trump is expected to speak about the plan on Wednesday afternoon. "It's a refreshing change from our current outdated tax code, which for too long hasn't worked for many Americans".
Another big tax break for the super-rich would come by way of the estate tax repeal.
The plan will also end the estate tax, which is a tax on the transfer of the estate of a deceased person.