White House tax plan would cut corporate, individual tax rates

Early details obtained by NBC News reveal that the large tax breaks for corporations and individuals will be an expensive endeavor.

Party leaders are quietly circulating proposals to lower the corporate tax rate from 35 percent to 20 percent and lower the top individual income tax rate from 39.6 percent to 35 percent, according to the people familiar with the plan. Most of the money that members of the middle class would gain from the tax cut will be taken away due to eliminated deductions.

The president met with Republicans and Democrats from the House tax-writing committee ahead of his visit to Indianapolis.

The tax reform plan would decrease the current seven personal tax brackets to three - 12, 25 and 35 percent - and almost doubles the standard deduction. There are now seven tax brackets ranging from 10 percent to 39.6 percent, which would be condensed into three brackets of 12 percent, 25 percent, and 35 percent.

Republican senators on opposing sides of the deficit debate have tentatively agreed on a plan for $1.5 trillion in tax cuts. The plan also may raise taxes on the very wealthy.

This is good news for Republicans, as the state and local tax deduction (SALT) is most valuable in blue states like NY and New Jersey, but bad news for tax payers in those states.

"Why should the American people believe anything House and Senate Republicans say about their tax plan when they don't even come close to meeting any of President Trump's stated goals about tax reform?.This has been a partisan process from the start with virtually no Democratic input, as Republicans have put politics above policy and the economic security of hardworking Americans", he said in a statement.

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International Monetary Fund chief Christine Lagarde warned Wednesday that the USA will fall short of its ambitious economic growth goals unless it can accelerate promised policy changes, including tax reform.

"He deals in generalities". In New Jersey, losing the break would cost taxpayers an upwards of $3,500, and Rep. Leonard Lance (R-NJ) told Bloomberg he has the "gravest reservations" on voting for a bill that includes a repeal of the SALT. "I donĀ¹t think he's tied to an ideological pathway to get there".

A copy of the plan to be released later Wednesday says, "Too many in our country are shut out of the dynamism of the USA economy".

Brady's counterpart in the Senate - Orrin Hatch, chairman of the Senate Finance Committee - has raised questions about just how unified a tax framework will be. "And that is going to be a matter of political taste".

While preparing to move on, Trump mourned the failure of another GOP effort to repeal the Affordable Care Act, also known as Obamacare.

But the fresh wounds from the latest failed Senate health care effort threaten to undermine the tax push as well, with some key lawmakers saying they should attach health care changes to the tax plan as a way to ensure both eventually become law. "Today's proposal hints at some of the avenues that lawmakers will pursue to pay for their desired tax reductions; these include eliminating business tax credits, repealing individual itemized deductions, and limiting business interest deductions". Speaking with conservative groups at the White House yesterday Trump, reassured them of his commitment when he gushed about the "tax cut" he was planning to unveil. One person described the president as "optimistic" about that timeline.

He also said the United States has one of the highest business-tax rates in the world and cutting them will again make the country "super competitive". "And that is why we are so singularly focused on getting this done this year".


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