Posted By RichC on September 28, 2017
President Trump will roll out his administration’s tax reform plan on Wednesday, seeking reductions in both the corporate and individual income tax rates, while doubling the standard deduction. The plan would cut corporate taxes from 35% to 20%, while dropping the top individual tax bracket from 39.6% to 35% and collapsing the current seven brackets to three, with the other two set at 25% and 12%. The income level at which those brackets would apply has not been specified. Some watchers suggest there is wiggle room to negotiate a fourth higher rate for the highest income earners.
The proposal calls for the removal of a number of deductions, but leaves the job of choosing which ones to eliminate to congress. The US brought in about $3.3T in revenue in 2016 – with 9% of that generated by corporate taxes ($300B) and 47% coming from individual income taxes ($1.55T). Critics argue the proposed tax rates will further increase the deficit ($585B in 2016) unless packaged with spending cuts.