There has been a lot of mixed reaction to President Trump’s tax reform proposals and many supporters believe his plan will have cuts benefiting everybody including those in the lower income brackets. Opponents say that this tax plan is geared primarily to the wealthy and will be giving them even more loopholes. But what is the real story behind what Trump and his Republican colleagues in the House and Senate are trying to work on?
Business Insider did a breakdown on the proposed plan based on suggestions put forward by Trump and his aides, and this is what they say about it. First, the tax plan has a reduced tax bracket to four with those of 12%, 25%, 35%, and 39.6%. The plan has savings in some categories where the standard deduction comes in and how he would like to eliminate some penalties on the upper earnings, but the plan also seems to be eliminating benefits for itemizing deductions.
So how much will those in the regular middle class income category save? For those who file single and have no children, those who make $25,000 a year or less are estimated to save about $178 in taxes owed. Those who make $75,000 a year are estimated to save about $2,000, and those who make $175,000 a little over $4,000. Those who file jointly could see double savings with a $24,000 deduction. While simplifying the tax brackets and increasing the standard deduction could lead to some more savings, those who expect a huge savings gain out of this may be disappointed.