President Trump Announces Tax Reform Plan
- Author: Leroy Wright Sep 29, 2017,
Sep 29, 2017, 23:20
Under the broader proposal, corporations would see their top tax rate cut from 35 percent to 20 percent. These businesses don't pay income taxes; instead their profits "pass through" to the owner, who then pays taxes on them at an individual tax rate.
Most significantly, the policy would remove the federal deduction on state and local taxes, effectively dealing a "death blow" to the 3.2 million NY residents who now claim that deduction, according to Governor Cuomo. Trump's plan does not specify a tax rate, leaving it to Congress. No one is certain if other deductions (beyond the mortgage interest and charity deductions) are being considered.
The committees will be looking to repeal some of the business tax credits including the R&D credit and the Low Income Housing Tax Credit.
"This initially appears to be a tax plan written by millionaires, for millionaires - at the expense of the rest of us", Stringer said. Republicans are desperate for a legislative victory after failing to overhaul the country's healthcare system and they have been trying to rewrite the USA tax code, which was last revised in 1986.
"But we're going to remove that barrier to create the tax system our people finally, finally, finally - and want and deserve".
The president and congressional Republicans this week released the outlines of a almost $6 trillion tax cut plan that would deeply reduce taxes for corporations, simplify tax brackets and almost double the standard deduction used by most tax filers. About 95 percent of the businesses in the US are structured as pass-through companies.
A study of a 2003 cut in the tax rate on corporate dividends found no that lower tax rates do not encourage corporate investment.
If Republicans stick to that, that married couple would get a roughly $110 tax cut. The committees will determine these rules. And while wonks are assuming that any deduction or exemption not mentioned is cut, they won't know for sure until there's a more detailed plan or bill.
The plan would cut the maximum personal income tax to 35 percent from 39.6 percent, but would nearly double the standard discount, a fixed amount of tax-free income, for all taxpayers.
Among the changes, Republicans would slim the number of tax brackets to three - with people charged at a 12%, 25% or 35% rate.
"Democrats don't want massive tax cuts - how does that win elections?" The plan includes an increased tax credit for children and introduces a new tax credit for non-child dependents. "There is a debate over whether to use current law vs. current policy as the baseline as well as the dynamic/static scoring debate". "It more than pays for a tax cut".
The plan will also end the estate tax, which is a tax on the transfer of the estate of a deceased person.
"I believe that any tax-reform plan should make the code flatter, fairer and simpler for families and businesses in our district, should allow middle-class families to keep more of their paychecks and should lower taxes on our small businesses so that they can compete around the globe", Stefanik said.
Over the next few months, the House and the Senate will build on this framework and produce legislation. Tax reform is the single best way to grow our economy.
He also went on to say that he can't guarantee that this tax plan wouldn't raise taxes for the middle class.