Tax Scholar Evaluates The Republican Tax Plan's Impact

Ways and Means Chairman Kevin Brady oversaw drafting of the plan which slashes taxes for corporations while providing benefits to American taxpayers. Lawmakers worked to squeeze the cuts into a $1.5 trillion budget allocation

A boat on the Se San River in Cambodia. It is reprinted here with permission.

"So this is a complete redesign of the code, so we can simplify it so much that nine out of 10 Americans can file by using a postcard-style system", Brady said.

Trump's tax plan is finally here. Tax rates would drop from 35 per cent to 20 per cent, in a move proponents say will put the U.S. more on par with competitors.

Tax existing overseas profits: The House bill would impose a one-time rate of 12% on existing foreign profits if they're being held offshore in cash or cash equivalents.

"Party leaders are rejecting criticism that their yet-to-be-unveiled tax plan will add to the ballooning federal deficit, saying the tax cuts will essentially pay for themselves by generating robust economic growth", the Times wrote. This allows most taxpayers to receive a credit for each of their children under age 17.

Next, take your adjusted gross income, that's line 37 from page one, and subtract out either the $US12,000 standard deduction or the $US24,000, depending on if you're single or married, to come up with your taxable income under Trump's proposed plan. President Trump recently said he wants the bill on his desk by Thanksgiving. Specifically, machinery and equipment could be fully expensed (temporarily). "It's going to be good for take-home pay".

The assumption that the average person saves less than $200 a month in a 401 (k) plan could be a crucial clue about Republicans' thinking. Capital expenditures, however, are a special case.

"What we are seeing today is a plan that exacerbates the unfairness and inequality in our tax code", Mr Schumer said on the Senate floor. The House Ways and Means tax plan would change that - temporarily and in part. Two of the key provisions in the plan meant to protect middle-income families would vanish in 2023. And Democrats in both chambers are almost unanimous in their discontent for both the bill and the partisan nature of its drafting.

The news sent shares in the country's largest homebuilders lower.

The overarching promise made to the middle class by Trump and congressional Republicans is that lower taxes would fuel faster economic growth, which, in turn, would cause incomes to rise. The rest would be treated as wage income and other compensation. For individuals, the mortgage-interest and charitable deductions, as well as the property-tax portion of the state and local tax deduction (capped at $10,000), would remain, but other itemized deductions would be eliminated. Their elimination would also be offset by an increase in the standard deduction and a higher child tax credit.

The tax plan would also repeal the deduction of substantial medical costs, including what families might spend on nursing home care. The deduction for state and local income and sales taxes would go away. There'd no longer be a preference for debt, but investments would still be encouraged.

"With the details they've presented to us so far, it looks like the tax cut benefits the wealthy and major corporations", said Martin Sullivan, chief economist at Tax Analysts and a former staff economist at the Treasury Department. Businesses with less than $25 million in gross receipts would be exempt from the limitation. - The 25 percent rate would start at $45,000 for individuals and $90,000 for married couples.

The SALT provisions are especially helpful to residents of high-taxed states such as California, New Jersey, New York and Virginia, allowing people to deduct state income taxes and property taxes, and has been in place since the advent of the federal income tax in 1913. Marco Rubio, and it abolishes the adoption tax credit altogether.

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