Trump Administration and Republican House and Senate Tax Policy Leaders Announce Tax Reform FrameworkWed, 27 Sep 2017 10:24:13 CDT
The Trump Administration, the House Committee on Ways and Means, and the Senate Committee on Finance have developed a unified framework to achieve pro-American, fiscally-responsible tax reform. This framework will deliver a 21st century tax code that is built for growth, supports middle-class families, defends our workers, protects our jobs, and puts America first. It will deliver fiscally responsible tax reform by broadening the tax base, closing loopholes and growing the economy.
“This is an exciting day for the millions of Americans who are tired of today’s broken tax code and have waited for years for better job opportunities, more take-home pay, and a stronger economy,” said House Ways and Means Committee Chairman Kevin Brady (R-TX). “Today, House Republicans joined President Trump and our Senate colleagues in letting the American people know: we’re taking action. After years of work, we are moving forward with a unified framework that paves the way for bold, transformational tax reform – tax reform that will bring more jobs, fairer taxes, and bigger paychecks. We have a lot of work ahead. But this moment marks a major step forward in the process.
“Now it’s time for the Ways and Means Committee to build on this momentum and deliver legislation that President Trump can ultimately sign into law. We are closer than ever to finishing what we have started for the American people – and 2017 is our year to make it happen.”
This unified framework serves as a template for the tax-writing committees that will develop legislation through a transparent and inclusive committee process. The committees will also develop additional reforms to improve the efficiency and effectiveness of tax laws and to effectuate the goals of the framework. The Chairmen welcome and encourage bipartisan support and participation in the process.
Here are highlights of the framework:
Lowers Rates for Individuals and Families
The framework shrinks the current seven tax brackets into three – 12%, 25% and 35% – with the potential for an additional top rate for the highest-income taxpayers to ensure that the wealthy do not contribute a lower share of taxes paid than they do today.
Doubles the Standard Deduction and Enhances the Child Tax Credit
The f ramework roughly doubles the standard deduction so that typical middle-class families will keep more of their paycheck. It also significantly increases the Child Tax Credit.
Eliminates Loopholes for the Wealthy, Protects Bed rock Provisions for Middle Class
To provide simplicity and fairness the framework eliminates many itemized deductions that are primarily used by the wealthy, but retains tax incentives for home mortgage interest and charitable contributions, as well as tax incentives for work, higher education, and retirement security.
The framework repeals the unfair Death Tax and substantially simplifies the tax code by repealing the existing individual AMT, which requires taxpayers to do their taxes twice.
Creates a New Lower Tax Rate and Structure for Small Businesses
The framework limits t he maximum tax rate for small and family-owned businesses to 25% -significantly lower than the top rate that these businesses pay today.
To Create Jobs and Promote Competitiveness, Lowers the Corporate Tax Rate
So that Americ a can compete on level playing field, the framework reduces the corporate tax rate to 20% – below the 22.5% average of the industrialized world.
To Boost the Economy, Allows “Expensing” of Capital Investments
The framework allows, for at least five years, businesses to immediately write off (or “expense”) the cost of new investments, giving a much-needed lift to the economy. Moves to an American Model for Competitiveness The framework ends the perverse incentive to offshore jobs and keep foreign profits overseas. It levels the playing field for American companies and workers.
Brings Profits Back Home
The framework brings home profits by imposing a one-time, low tax rate on wealth that has already accumulated overseas so there is no tax incentive to keeping the money offshore
The complete framework can be seen by clicking here.
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