Earlier, we reported on the expected unveiling of the GOP’s tax plan for 2018, and we outlined the massive cuts that Donald Trump proposed on the campaign trail.
We didn’t have any confirmed specifics available, but quoted House Freedom Caucus member David Brat, who said that there was an agreement on at least $2 trillion in tax cuts over the next ten years.
Well, the plan out today (which you can read in its entirety here) cuts two and a half times what Brat claimed!
Perhaps the best feature of the plan is that it calls for increasing the standard deduction to $12,000 for individuals and $24,000 for families — doubling the amount of personal income that’s tax-free. Republicans said the change amounted to a larger “zero tax bracket.”
According to the Associated Press,
President Donald Trump and congressional Republicans are proposing a far-reaching, $5 trillion plan Wednesday that would cut taxes for corporations and individuals, simplify the tax system and nearly double the standard deduction used by most Americans.
The plan is sweeping in scope, but omits critical, controversial details that are likely to take months to work out in a bitterly divided, GOP-led Congress. Republicans see tax overhaul as a once-in-a-generation opportunity that could produce a large political payoff.
There are no details on how much it would cost, though back-of-the-envelope estimates by outside experts put the tax cuts in the range of $5 trillion over the next 10 years. The net cost to the federal debt would be far less — probably in the range of $1.5 trillion under deal put together by Senate Budget Committee Republicans.
The plan would collapse the number of personal tax brackets from seven to three. The individual tax rates would be 12 percent, 25 percent and 35 percent — and the plan recommends a surcharge for the very wealthy. But it doesn’t set the income levels at which the rates would apply, so it’s unclear just how much of a tax change there might be for a typical family.
The plan would nearly double the standard deduction to $12,000 for individuals and $24,000 for families. This basically would increase the amount of personal income that is tax-free.
It would seek to help families by calling for an increased child tax credit and opening it to families with higher incomes. The credit currently is $1,000 per child.
Also proposed is a new tax credit of $500 to help pay for the care of the elderly and the sick who are claimed as dependents by the taxpayer.
Companies would find themselves paying substantially lower tax rates, part of an effort to make U.S. businesses more competitive globally.