The White House on Wednesday began laying out President Trump's tax plan, which calls for sharp cuts for businesses and individuals. The administration says the cuts will spur economic growth and bring jobs and prosperity to America's middle class, though lawmakers were worried about ballooning federal deficits. Much of the details have yet to be hashed out with Congress. Some highlights, per the AP:
- Trump's plan would reduce the number of personal income tax brackets to three from seven: rates of 10%, 25%, and 35%. The current maximum is 39.6%.
- It would double the standard deduction for married couples to $24,000, while keeping deductions for charitable giving and mortgage interest payments.
- The administration plans to provide tax relief for families with child care expenses, too, although the specifics have yet to be included.
- The plan would trim deductions utilized by wealthier Americans. This would include deductions for state and local tax payments, a change that could alienate support from lawmakers in states such as California and New York with higher state taxes.
- It would also repeal the estate tax and the alternative minimum tax.
- On the corporate side, the top marginal tax rate would fall from 35% to 15%.
- Small businesses that account for their owners' personal incomes would see their top tax rate go from 39.6% to the proposed corporate tax rate of 15%. Treasury Secretary Steve Mnuchin, who earlier called the plan the "biggest tax cut" in history, said the change for small-business owners—a group that under the current definition could include doctors, lawyers, and even major real estate companies—would be done to ensure that wealthier Americans could not exploit the change to pay less in taxes.
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