Top White House officials revealed and outlined President Donald Trump’s tax plan on Wednesday.
National Economic Council Director Gary Cohn described the proposal as “The most significant tax reform legislation since 1986 and one of the biggest tax cuts in American history.”
Trump’s tax plan largely echoes the tax plan he outlined as a presidential candidate.
- Trump’s plan cuts the number of income brackets from 7 to 3. The three rates are 10%, 25%, and 35%, though it has not been made clear what income ranges will fall under those brackets.
- It will double the standard deduction for married couples from $12,700 to about $24,000, and for single-filers from $6,300 to $12,600.
- It will cut the corporate tax rate to 15% from 35%, which applies to corporations, small-businesses, and large owner-operated conglomerates.
- It would eliminate most tax deductions, including deductions charitable giving, retirement savings, and mortgage interest.
- It will implement a “one-time tax” on the trillions of dollars held by corporations overseas. Secretary of the Treasury Steve Mnuchin stated that the one-time repatriation rate has not been determined, but will be “very competitive.”
- It gets rid of the estate tax, a.k.a the “death tax.”
- It repeals the alternative minimum tax and 3.8 percent Obamacare taxes.
- Mnuchin stated that the U.S. would go to a “territorial” tax system. No further details were provided, but such tax systems typically exclude most or all of the income that businesses earn overseas.
Mnuchin did not answer when asked if the plan would be revenue neutral, meaning that it would not raise the deficit.
He also stated that he wants to see legislation on tax reform passed by the end of the year, though it is not clear how soon reform could be passed.
Cohn said that the White House is in constant dialogue with Congress about the proposal, and that “very firm” details will be released as soon as possible.
House Speaker Paul Ryan told reporters at news conference with GOP leaders that they have “been briefed on what [the White House is] going to do, and it’s basically along exactly the same lines that we want to go.”
Photo Credit: Associated Press
Nicholas Amato
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