It remains to be clarified how the tax cuts will be compensated for to balance the public accounts and avoid raising the deficit. But so far, one of the only tax breaks they've identified for elimination is the deduction for state and local taxes, a move that would be especially costly for people in high-tax blue states. Families get up to a $1,000 credit per child under current law.
But it would also slam high-income New Yorkers. Like on the individual side, most of the itemized deductions will be eliminated, with the exceptions being capital reinvestment, interest deductibility, research and development, and low-income housing.
That's not true. Trump's plan, which calls for reducing the number of tax brackets from seven to three, lowers the top rate from 39.6 percent to 35 percent, while repealing the estate tax and the alternative minimum tax, both of which are paid nearly entirely by the wealthy.
The plan would simplify the tax system, cut taxes for individuals and corporations and almost double the standard deduction for individuals and families.
Reduced taxes on businesses and more generous deductions will lead to more jobs and higher wages, Trump said, and provide an incentive for companies based overseas to set up shop in the U.S.
President Trump is delivering a speech in IN on Wednesday where he will describe his proposal to reform the American tax system.
Republicans from New Jersey and California have also cried foul, and together with New York Republicans like Reps.
"I applaud President Trump and my colleagues in Congress for making this a top priority and for unveiling this framework today, and I look forward to representing the North Country during the tax reform process". They claim it is "fully aligned" with the House and Senate committees now working on the policy.
Even going on to say the first $12,000 dollar you earn, by a single individual, will be tax free. The White House maintained the wealthy would continue to pay the bulk of federal income taxes.
What Trump's plan says: "So that America can compete on [a] level playing field, the framework reduces the corporate tax rate to 20% - below the 22.5% average of the industrialized world". Firms where the profit doubles as the owner's personal income will also see a cut. They would pay at a 25 percent rate, down 39.6 percent. They are investors, executives, doctors, and other highly skilled individuals. Numerous details are vague and will rely on the congressional tax-writing committees to craft legislation.
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