GOP tax plan nearly doubles standard deduction

Wednesday, 27 Sep, 2017

Wednesday's push comes as Republicans renew their tax cut effort with a sense of political desperation, furious that repeated attempts to repeal the Affordable Care Act have collapsed in the Senate.

In addition to the slight uptick for the lowest tax bracket, the Republican plan is expected to propose lowering the top individual tax rate to 35% from 39.6%.

On the other side, Treasury Secretary Steven Mnuchin recently told Fox News that "most economists believe that over 70 percent of corporate taxes are paid for by the workers", despite his own department's previous analysis.

While those measures, a raise in the bottom tax rate combined with a doubling of the standard deduction, in isolation could benefit low and middle income families, there are still major moving parts that have yet to be identified.

Republicans are viewed as the preferred party to get something done on tax reform, with 41 percent saying they think congressional Republicans can be trusted to handle tax reform and 35 percent saying they trust congressional Democrats more.

US President Donald Trump speaks before a meeting with lawmakers in the Cabinet Room of the White House on September 13, 2017, in Washington, DC.

"[Republicans] are clearly looking for ways to offset the enormous tax cuts their plan gives to the wealthy and corporations".

Note: This version of the story has been updated to clarify attribution.

But many details were left unclear, including what income levels would qualify for the different brackets, and whether the tax changes overall would increase the deficit - an issue that could determine whether the tax changes are permanent or need to be renewed periodically. "We will become a competitive nation again".

He said lawmakers should expect a "very, very powerful document" that would deliver a big tax cut for the middle class.

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. The tax-writing committee is now drafting the House's version of Trump's promised tax reform bill.

External estimates, based on initial reports of the plan and not full details, found that it would cut taxes by $5.5 trillion over 10 years.

The president's tax proposal eliminates two taxes that mostly benefit the wealthy, and cuts a third tax roughly in half.

Meadows said Tuesday that he'd only vote for a tax overhaul if it cuts the rate for corporations to 20 percent or lower and omits an global minimum tax, reduces the rate for pass-through entities - where the businesses go untaxed but the owners pay up on the profits individually - to at least 25 percent, and doubles the standard deduction for individuals. There's a reason why individual income-tax cuts would tend to favor higher earners, he said: "The income tax is not a broad-based revenue-raiser anymore, it's a surtax on high income people".

Analysts have warned that huge tax cuts would balloon the federal deficit and debt if the economic growth projected by Republicans fails to materialize amid rising interest rates.

Senate Finance Committee Chairman Orrin Hatch has also called for bipartisan tax reform. The news website Axios reported on Saturday that the Big Six had already agreed to a 20 percent rate.

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.

You're all gonna get fucked along with the rest of us! On Tuesday, Rep. Mark Meadows, the leader of the House Freedom Caucus, warned that he would vote against the tax package if the corporate rate is above 20 percent.