Will the middle class get a real tax cut this year?

by Harriet Bell September 28, 2017, 0:22
Will the middle class get a real tax cut this year?

These businesses, partnerships and sole proprietorships whose profits "pass through" to their owners, would be taxed at a rate of 25 percent, not the individual rate of their owners, like under the current law. "It violates Trump's tax pledge that the rich would not gain at all under his plan by offering sweetheart deals for powerful CEOs, giveaways for campaign coffers and a new way to cheat taxes for Mar-a-Lago's loyal members".

News about the framework reveals what many have come to expect-a reduction of taxes for most Americans, with many cuts tailored towards corporations and top-earners in an effort to boost the economy.

Trump confirmed that his administration has hammered out a plan with congressional Republican leaders - though his administration has stopped short of confirming any details. "I think it's going to go through, and it will be the largest tax cut in the history of the country", the president told reporters as he prepared to return to the White House from his New Jersey golf resort.

"We think that is going to help bring more investment and more income back to the USA rather than keeping it offshore, and it will help level the playing field for our companies so they can better compete with foreign companies that already have that kind of tax treatment", the official said.

For businesses, the plan would cut the tax rate from 35 percent to 20 percent and would allow companies to write off capital spending for at least five years. The U.S. will see itself lose $1.0 trillion in revenue over the next 10 years if the tax plan passes through Congress.

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On the eve of the grand rollout of the plan, details emerged on Capitol Hill on Tuesday while Trump personally appealed to House Republicans and Democrats at the White House to get behind his proposal.

President Donald Trump is in a big rush for Congress to approve big tax cuts, and he is using the damage left by Hurricane Irma to argue his case.

The framework is the product of the so-called Big Six of US policy makers on taxes: House Ways and Means Chairman Kevin Brady (R., Texas), Senate Finance Chairman Orrin Hatch (R., Utah), Treasury Secretary Steven Mnuchin, White House economic policy chief Gary Cohn, Senate Majority Leader Mitch McConnell (R., Ky.) and House Speaker Paul Ryan (R., Wis.). "We're hoping to advance our agenda, and that's one of our key platform positions".

The seven tax brackets that are now in place today are going to be reduced to three brackets: 12, 25, and 35 percent.

-Many itemized deductions would be eliminated, though it's not clear which ones would go, though incentives for contributing to IRAs, along with mortgage deductions, would continue.

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Trump called for reducing the personal income tax brackets from seven to three, doubling the standard deduction for married and single filers, slashing the corporate tax rate and eliminating the estate tax.

The outline comes with a promise that the tax overhaul will be focused on relief for the middle class. It doubles the standard deduction and increase the child tax credit.

The White House and a spokeswoman for the House Ways and Means Committee did not respond to a request for comment on the Axios report, or a request to confirm the proposed standard deduction rates.

Neal said Trump showed a readiness to avoid cutting taxes for the wealthy during their meeting.

Repealing the "death tax", or estate tax, as well as the alternative minimum tax.

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