After campaigning hard for the importance of tax reform, President Trump and his advisors released an early stage tax code change framework on Wednesday, September 27. From his podium in Indianapolis, IN, Trump explained that his framework would cut taxes for businesses and individuals and potentially deliver a “middle class miracle.”
As he put it, “…we will cut taxes for the everyday, hardworking Americans…”
While the House and Senate will still have significant work to do to in order to finalize the tax plan and craft new legislation, the initial review of Trump’s framework has some substantial changes to the current tax law, which could represent the largest tax reform change passed in 30 years.
Key highlights of the changes outlined in the Republican framework include:
- Reducing personal income brackets from seven to three (12%, 25%, and 35%), although congressional committees would have the latitude to create a fourth, higher income tax bracket
- Doubling the standard deduction for single and married filers ($12,000 and $24,000 respectively)
- Increasing the child tax credit for all children under the age of 17 to $1,000
- Creating a new $500 tax credit for dependents, such as the elderly
- Repealing the alternative minimum tax (AMT)
- Repealing the estate tax
- Slashing the corporate tax rate to 20%
- Changing the pass-through tax rate for businesses to 25%
- Creating a one-time repatriation tax for all overseas assets from US-owned companies
The information presented by WrapManager, Inc. is general information only and does not represent tax or legal advice, either expressed or implied. You are encouraged to seek professional tax advice for income tax questions and assistance. WrapManager, Inc. does not advise on any income tax requirements or issues.