The national debt is now over $20 trillion (more than 100 percent of US gross domestic product), a level that worries many economists and policy analysts. The taxpayer would be able to claim them as a dependent.
As for companies, the proposal would slash the corporate tax rate from 35 percent to 20 percent.
The document was released on Wednesday morning.
But Trump singled out the most prominent Democrat in the audience, saying if Senator Joe Donnelly doesn’t support it, “we’ll come after him like you wouldn’t believe” in next year’s election. Also eliminated? The estate tax. Trump won both IN and North Dakota handily IN 2016. Third, tax reform should go through the normal legislative process so both Democrats and Republicans have an opportunity to craft a bipartisan package.
The tax plan seeks to slash the corporate rate from 35 per cent to 20 per cent and create three individual tax brackets with rates of 12 per cent, 25 per cent and 35 per cent, with a recommended surcharge on the very wealthy.
It’s hard to tell exactly who will benefit, University of St. Thomas finance Professor John Spry says, though it seems like the majority of people would see a tax cut under the president’s plan.
Trump promoted the idea of cutting taxes for working-class Americans, allowing the first $12,000 of earned income to remain tax-free – $24,000 for married couples.
Despite touting the plan as a “middle class miracle”, and it may be, it is unclear at this point who would benefit from the Trump administration’s tax reform proposal: the rich, the poor, or the in-betweeners. The top individual income tax rate would come down to 35 percent from 39.6%, and there would also be the potential for an additional top rate for highest-income earners “to ensure that the wealthy do no contribute a lower share of tax paid than they do today”. This “pass thru” change would be a big win for many sole proprietorships, partnerships and S corporations.
“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. Tom MacArthur and Rodney Frelinghuysen, along with a handful of other lawmakers, said earlier this month in a letter to Treasury Secretary Steven Mnuchin that eliminating SALT “unfairly penalizes residents in high-tax states like New York, California, Illinois, and New Jersey, where middle-class families can least afford another tax increase”.