With a passive/aggressive boast that “it’s not good for me,” Donald Trump introduced his proposed tax reform plan at a rally in Indiana.
Note: he prefers everyone call it “tax cuts” for better marketing. That should tell you something right off the bat.
Here are the main details you should know:
The current 7 tax brackets would become just three consisting of 12%, 25%, and 35%. The current top rate is 39.6% and the lowest rate is 10%.
While that’s an uptick for the lowest income Americans, Trump says that would be offset by doubling the current standard deduction to $12,000 for individuals and to $24,000 for married couples. That would also simplify the complex process of itemized deductions for millions.
Most itemized deductions would also be eliminated, but would preserve deductions for mortgage interest expenses, charitable giving, as well as retaining incentives for education and retirement savings plans.
Trump’s proposal also includes the option of adding a fourth higher rate above 35% to pretend the rich might their fair share. But there are no indications of what income levels would be associated with the higher rate, or what that new rate might be. I don’t see Republicans doing anything with this.
The child tax credit will increase to an unspecified amount.
Trump is proposing no more inheritance tax (a huge boon to rich folks) as well as getting rid of the alternative minimum tax.
Corporate taxes would drop from 35% to 20%.
While Team Trump didn’t offer an immediate cost estimate for the plan, a preliminary estimate from the nonpartisan Committee for a Responsible Federal Budget calculated a loss of around $2.2 trillion in taxes to the government over the next 10 years.
Donald Trump and the Republicans say the tax reforms will rev up the U.S. economic engine, thus compensating for lost revenue. Trump repeatedly promised during the election that overhauling the tax code would raise economic growth to 4 percent.
Find more details at the New York Times.