Trump Lays Out Tax Plan

Trump Lays Out Tax Plan

President Trump announced his plans for tax reform at an event in IN on Wednesday.

The plan also shrinks the tax brackets from seven to three and doubles the standard deduction which means low income earners could pay no taxes. Those are important details, which will be sorted out by Congress.

They haven't specified where those brackets would apply, but Trump's last campaign tax plan applied the 25% bracket up to $112,500 of taxable income ($225,000 for married couples).

The framework is the result of months of closed-door discussions between top Trump administration officials and Republican congressional leaders, but Trump has signaled in recent weeks that he is hoping to win some Democratic support for his proposal.

It lowers the corporate tax rate to 20 percent and eliminates four income tax brackets.

Best of all, big multinational corporations who book profits overseas will no longer owe any American corporate income tax whatsoever.

The proposal was embraced by the US Chamber of Commerce business lobbying group and an organisation called the RATE Coalition representing large American companies including AT&T Inc, FedEx Corp, Home Depot Inc, General Dynamics Corp and Walmart Stores Inc.

Businesses that pay corporate income tax will see their profits taxed at a rate of 20 percent rather than 35 percent. The tax is now set at 40% on estates worth $5.49m for an individual or $10.9m for a couple. About 95 percent of the businesses in the USA are structured as pass-through companies.

US President Donald Trump on Wednesday proposed a sweeping overhaul of the nation's tax code, touting it as a "historic' move that will boost economic growth and spur job creation".

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The tax proposal gets rid of the personal exemption that filers now claim for each taxpayer and dependent.

And Sen. Ron Wyden, D-Ore., said that the doubling of the standard deduction is a "massive step backwards" because it also eliminates personal deductions, which is how many middle-class families lower their tax bill.

"Today we are taking the next step to liberate Americans from our broken tax code", House Speaker Paul Ryan said.

-The national debt. Trump's plan doesn't include enough details to precisely project its impact on the government's finances. Or it would be forced to run the national debt up to unsafe levels, likely driving up borrowing rates for consumers and businesses.

Some critics said the plan may need to be pared back if Congress can not agree on $4 trillion in offsets.

The Republicans pitching the plan say economic growth will compensate for compensate for lost revenue.

The heart of the president's message to the 400 people invited to the speech was an appeal to the individual taxpayer frustrated with the current federal tax code. Here are three things you need to know about this change, which would affect a huge number of USA businesses.

Are you interested in learning more about tax reform? The plan would impose a new, lower tax on corporate profits stashed overseas, and create a new tax structure for overseas business operations of USA companies. If his children inherit that amount, they would save $1.4bn in taxes.