Trump tax plan expected to double standard deduction, lower corporate rate

In a document obtained by The Associated Press on Wednesday, they outline a blueprint for nearly doubling the standard deduction for married taxpayers filing jointly to $24,000, and $12,000 for individuals.

Reports have said the plan calls for lowering the top bracket for individuals to 35% from what is now 39.6%. Trump is scheduled to speak at 3:20 p.m. Wednesday at an appearance in Indianapolis. Senate GOP leaders are trying to quash that effort, anxious it could doom the tax cut initiative and leave the party with nothing to show for its majority rule heading into the 2018 midterm elections. As of yesterday morning Trump hadn't signed off on the final product, and as with all policy announcements involving Trump, Republican Hill leaders will be holding their breaths to some extent until the president actually utters the words.

The GOP plan, called the "Unified Framework For Fixing Our Broken Tax Code", has a long way to go and many details to be hammered out - notably a complete list of deductions that will be zapped, and how to make up trillions in less tax revenue without accelerating the growth rate of the federal debt.

I'm not going to write too much about this right now, since we still don't have all the specifics, but President Trump today unveiled at least part of the GOP tax reform plan.

Trump and Treasury Secretary Steven Mnuchin have said previously that they didn't want the tax plan to offer any tax cut to the highest earners - and that they'd balance a rate cut by eliminating deductions that the wealthy use to reduce their tax bills.

Taxing passthrough income at a maximum rate of 25%.

The individual tax rates would be 12 percent, 25 percent and 35 percent - and the plan recommends a surcharge for the very wealthy. The plan would keep tax incentives for mortgage interest and charitable contributions in place and would eliminate the death tax. We can unleash the economy, promoting growth, attracting jobs and improving American competitiveness in the global market, " said Senate Majority Leader Mitch McConnell, a Kentucky Republican.

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Republicans and Democrats who met with Trump on Tuesday said afterward that the president indicated an interest in working with Democrats on both tax reform and healthcare going forward.

"It's important to note that by increasing the standard deduction (as was on the one-pager we released in April) we're effectively increasing the size of the 0% tax bracket, so that the hardworking American at the bottom of the economic ladder is empowered to climb their way up", the representative said. The current rate is high by global standards and corporations have been seeking a tax cut for years, even though many of them pay much less than the headline rate due to loopholes and tax breaks.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) on Monday said the House and Senate will pass budget proposals ahead of the tax legislation to ensure Republicans can take advantage of the fast-track reconciliation process to pass a tax overhaul by the end of the year.

Unfortunately for Trump's strongest supporters, it isn't likely that the tax proposals we're going to see from Congress will resemble the tax slashing promised on the campaign trail.

Repeal the Alternative Minimum Tax: The AMT most typically hits filers making between $200,000 and $1 million.

Trump's push on tax reform comes on the heels of his latest in a string of stinging defeats on health care reform, with Senate Republicans repeatedly failing to string together 50 votes to replace Obamacare.

Trump has previously said he doesn't want the tax overhaul to be a break for the rich.

(Copyright © 2015. All Rights Reserved.)
 
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