The tax reform framework reduces the seven current income brackets down to three.
Also eliminated would be the personal exemptions, which let taxpayers deduct $4,050 per person in the household. Tax credits for families with children would be increased, and the standard deduction applicable to all Americans would be doubled in some cases. However, after six months of working on the plan, analysts say, "The outline still lacks vital details about how middle class families would fare". The rest take the standard deduction. They could put 20 percent down on paper and he could go out and say 15 percent anyway.
"The tax reform would increase the gross domestic product growth by 1 percentage point", which in 10 years "would amount to $10 trillion more GDP, $3 trillion more in revenue to the federal government", he said. "Today's proposal hints at some of the avenues that lawmakers will pursue to pay for their desired tax reductions; these include eliminating business tax credits, repealing individual itemized deductions and limiting business interest deductions".
"We are determined to make smart investments in job creation programs and community colleges, make child care and education more affordable and strengthen retirement security for all Americans", he said.
A corporation in the 35 percent tax bracket repatriates $1 million of income earned overseas, it would owe $350,000 in US tax. In exchange for the lower rate, the White House wants to eliminate the corporate Alternative Minimum Tax.
"We want our companies to hire and grow in America, to raise wages for American workers, and to help rebuild American cities and towns", Trump said.
The plan, entitled the "Unified Framework For Fixing Our Broken Tax Code", was announced jointly by the White House and Republican lawmakers heading the House and Senate Ways and Means Committees and is the working document whereby the administration is seeking to craft the biggest USA tax reform since 1980.
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