FOLLOWING their failure to pass a health-care bill, the White House and Republican leaders in Congress are eager to move on to their next priority: tax cuts. On September 27th they released a sketch of a tax plan, after months of negotiations and several false starts earlier this year. The document—though still relatively short on detail, given the work that has supposedly gone into it—proposes the most significant change to the federal tax code since 1986. Whether it can be turned into passable legislation, or whether it instead meets the same fate as Republicans’ health-policy ideas, remains to be seen.
Launching the plan, President Donald Trump reiterated his promise that the tax cuts would benefit “the middle class, the working men and women, not the highest-income earners”. To that end, he promises a near-doubling of the standard deduction, the amount that can be earned before paying income tax. For an individual, it would rise to $12,000, from $6,350 today. That is much less generous than it sounds, because Republicans would also abolish the personal exemption, currently worth $4,050, which performs a similar function. The total amount that could be earned tax-free would go up only slightly. The plan is also to raise the bottom rate of income tax, from 10% to 12%.
The top rate of tax, by contrast, would fall from 39.6% to 35%. (Mr Trump...Continue reading
Source: United States http://ift.tt/2xNuKg3
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