President Donald Trump and top Republicans will promise a package of sweeping tax cuts for companies and individuals, people briefed on the planning said, but the GOP leaders will stop short of labeling numerous tax breaks they hope to strip away, putting off controversial decisions that threaten to sink the party's tax effort.
President Trump said Sunday the White House has "totally finalized" a tax plan, but the particulars differed substantially from what has been reported about the proposal.
Trump said he hoped for a corporate tax rate of 15%, a figure he has used before.
-Corporations. Trump's plan would lower the top corporate income tax rate from 35 percent to 20 percent.
Rates in the lowest tax bracket, however, may actually increase, from 10 percent to 12 percent, according to a report Tuesday from Axios.
The tax proposal will be released jointly by the Trump administration, the House Ways and Means Committee, and the Senate Finance Committee. While Republicans see the tax breaks as essential to creating jobs and meeting the White House's lofty goals of three-percent GDP growth by 2020, Democrats will likely oppose numerous tax benefits that will be going to corporations and extremely wealthy individuals.
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The plan would maintain tax breaks for charitable giving and mortgage interest, and it also proposes amendments to the tax code that would benefit education and retirement. Naturally, Democrats are even less supportive, opposing such tax cuts by a staggering 33-62 margin. The lead tax writers in the administration and Congress are set to release new details of their proposal this week before releasing a bill and moving through the legislative process starting next month. The biggest area where Pennsylvania taxpayers could see a change is in deductions for state and local taxes.
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. "It's little more than an across-the-board tax cut for America's millionaires and billionaires".
The GOP plan for the first major rewrite of the US tax code in 30 years also says corporations will be stopped from shipping jobs and capital overseas. Congress may decide to create a fourth bracket above 35 percent. Kevin Brady who is a Texas Representative says that the reforms will result in the lowest tax cuts in modern business history. Republicans love to call the estate tax "the death tax", but the idea that family farms and small businesses are being routinely lost because of the estate tax is a myth. Congress' Joint Committee of Taxation says far less than 1 percent of all Americans pay any estate tax, and almost all of them are among the wealthiest 5 percent.
It will be hard to tell who gets the tax cuts under the plan until lawmakers release a complete tax bill and independent analysts examine how the distribution of the tax burden differs from today's tax system.