GOP Plan Would Cut Corporate and Individual Taxes, Repeal Estate Tax

https://www.nbcnews.com/politics/congress/gop-plan-cuts-corporate-individual-taxes-repeals-estate-tax-n805126

by Leigh Ann Caldwell
Sept. 27, 2017

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The highly anticipated proposal still has a long way to go before it can be voted on, but Republicans outlined their objectives in a nine-page document Wednesday morning.

The plan includes long-held Republican goals of reducing the corporate tax rate and simplifying the tax code. It lowers the corporate tax rate to 20 percent and eliminates four income tax brackets. It doubles the standard deduction and increases the child tax credit. It also repeals the estate tax but keeps the deductions for mortgage interest and charitable giving, all tax breaks that tend to affect high-income tax payers. But it is expected to cost trillions of dollars and Republicans haven't yet presented a clear way to pay for it.

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But Democrats say that the plan will harm the middle class while giving major tax breaks to the wealthy. Senate Minority Leader Chuck Schumer called it a “disappointment” because it “deviates” from Trump’s promise to benefit the middle class.

“They raise the bottom rate from 10 to 12 percent, the lowest rate on the poorest and working-class Americans,” Schumer said. “So what the plan does is, the top rate on the wealthiest comes down and the bottom rate on working-class families goes up. What kind of plan is this?”

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Here is what is in the plan:

Individual Taxes

• Repeals the estate tax.
• Nearly doubles the standard deduction to $12,000 for individuals and $24,000 for those filing jointly.
• Reduces the number of tax brackets from seven to three with the highest being 35 percent and the lowest being 12 percent.
• Increases the child tax credit to an unspecified amount over the current $1,000.
• Adds a $500 credit for the care of nonchildren dependents.
• Eliminates most deductions, including the state and local tax deduction.
• Preserves the mortgage interest deduction and the charitable deduction, two of the most popular deductions that more often benefit wealthier Americans.
• Repeals the Alternative Minimum Tax.

Corporate Taxes

• Reduces the corporate tax rate to 20 percent.
• Caps the small business rate to 25 percent.
• Transitions the global corporate tax to a territorial tax.
• Aims to repeal the corporate AMT.