The bill released on Friday afternoon by the Tax Cuts and Jobs Act Conference Committee pegs the new rates at 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 37 percent. Republicans need that money to pass giant tax cuts for the rich without violating their budget resolution (which forbids them from adding more than $1.5 trillion to the deficit over the next ten years).
President Trump promised the new GOP tax cut package will be wrapped up before Christmas..
The Estate Tax, colloquially termed the Death Tax by opponents, will be repealed after six years under the new tax reform, and the exemption will be doubled in the meantime.The GOP said that businesses and family-owned farms "will no longer have to worry about double or triple taxation from Washington when they pass down their life's work to the next generation".
No stranger to hyperbole, Trump also predicted the legislation would cause the economy to soar beyond its current 3 percent rate of growth.
Deductions and exceptions: now, the standard deduction for singles is $6,350 while it is $12,700 for married, joint filers.
The plan eliminates personal exemptions and a slew of itemized deductions but almost doubles the standard deduction in a bid to make tax filing simpler and to reduce rates. The law would raise it to $70,300 for singles and $109,400 for joint filers. Repealing the tax penalty for going without insurance will decrease participation in Obamacare - and thus, decrease the amount the government spends on health insurance subsidies by roughly $300 billion over the next decade.
However, a study by the nonpartisan Tax Policy Center of the Senate bill - which is likely to bear the most resemblance to what comes out of conference - found that 62 percent of the benefits from the tax cuts would be accrued by income earners in the top 1 percent, while 0.1 percent of income earners would suck up 42.3 percent of the benefits from the tax overhaul. The Florida senator's (cogent) argument being that working parents who don't earn enough money to pay much federal income tax - but are still subject to payroll taxes - shouldn't get a smaller child-care subsidy than millionaire couples do. The final bill calls for a $2,000 per child credit - families making up to about $400,000 get take the credit.
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Exemption is doubled so no estate worth less than almost $11 million would be taxed. The proposal would double the threshold.
One of the most controversial parts of the plan is the push to greatly scale back how much state and local taxes Americans can deduct on their federal taxes. But it would scale back the deduction for state and local taxes, allowing families to deduct only up to a total of $10,000 in property and income taxes.
For residences bought from January 1, through December 25, 2025, the plan caps the deduction for mortgage interest at $750,000 in loan value. A letter by two dozen mayors in support of keeping the credit along with pressure from auto manufacturers helped change the final bill to keep the discount.
Here are the proposed rates for married couples who file jointly. For 2018 and 2019, expenses exceeding 7.5% of income are deductible; that percentage increases to 10%, the current level, in 2020.
When will Congress vote on it?"It is just the opposite of what America needs, and Republicans will rue the day they pass this", he said in a statement.
Lawmakers will vote on the proposal next week, with all nine Republican members of the House and Senate who represent Nebraska and western Iowa expected to support it.