Republican Tax Plan Seeks Big Cuts, Retention of Popular Deductions

The plan would raise the standard deduction to $12,000 for single filers and $24,000 for married taxpayers filing jointly.

Vice President Mike Pence will not be at the Indianapolis event, but he was in Anderson last week to promote the president's upcoming visit and proposed tax changes.

But the tax cuts still represent a bigger win for companies than some skeptical executives had anticipated.

It was forged during months of high-level talks among Mr Trump's aides and top Republicans in Congress, but offered scant details about how to pay for the cuts without dramatically driving up federal deficits.

Republicans' "unified" framework, which they will release and promote Wednesday during speeches and meetings, aims to cut taxes by more than $5 trillion over 10 years and recoup more than half of that lost revenue by eliminating numerous tax breaks.

So-called pass-through businesses that pay taxes through the individual code - from mom-and-pop operations to large partnerships such as law firms, hedge funds and some of Trump's own businesses - would see their top tax rate drop to 25 percent from 39.6 percent.

Despite fierce opposition from high-tax states when the idea was first floated, the Trump administration is pushing ahead with the repeal, which would remove state and local income and property taxes as deductions on federal returns.


Despite the obvious boon for rich individuals and corporations, Trump insisted it was a middle class tax cut.

"If we do this, we will create millions of new jobs for our people", he said. This loophole would slash the tax rate on the profits from these businesses by more than a third.

Reduce individual income tax rates: The framework shrinks the number of tax rates to just three from seven today.

But up to now, the drive for tax reform has been repeatedly delayed and Wednesday's plan was likely to be light on specifics.

The president will pump the deal the White House made with leading House and Senate Republicans on Wednesday in Vice President Mike Pence's home state of Indiana.

The President said his tax cut proposal wouldn't help the country's wealthiest taxpayers - including himself - but suggested it would bolster his legacy instead.

US President Donald J Trump (centre) met Tuesday in Washington with top congressional figures, House Ways and Means Committee Chairman Kevin Brady (right) and Ways and Means Committee Ranking Member Richard Neal.


They will propose almost doubling the standard deduction, which allows people to lower their taxable income. It lowers the corporate tax rate to 20 percent and eliminates four income tax brackets.

Rep. Richard Neal of MA, the top Democrat on the Ways and Means Committee, came away from the White House meeting in a negotiating mood.

The plan also calls for the end of the alternative minimum tax, a provision that was originally created to ensure that the wealthy would not be able to avoid taxes altogether but which has become a burden on the middle class due to inflation and bracket creep.

The current tax brackets for individuals are expected to be pared down to as few as three, with the highest bracket to be lowered to 35 percent.

He said the proposal would call for simplifying the tax code, calling the current version "too complicated".

Trump had initially pushed for cutting the 39.6 percent corporate tax rate to 15 percent. Mnuchin said in November, weeks after Trump's election, that "there will be no absolute tax cut for the upper class".



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