Republicans have reached a deal on the tax plan. They plan on sending it to President Donald Trump next week. This is according to inside sources.
Republicans have been hashing out the details of the tax plan for months. Various disagreements have come up. It has taken a lot of time to come up with a plan that is agreeable to all parties. However, it seems like that point has now been reached.
There were plenty of negotiations over the past few weeks, because various details of the tax plan were opposed by certain members of Congress. However, Republicans are now starting to put the tax plan in legislative text. Of course, there is still the possibility of further disagreements.
The Republican tax plan will reform the tax code and will have a sweeping economic effect. The tax plan keeps the 7 income brackets, but changes them slightly and reduces the tax rates for those brackets. It also greatly reduces the corporate tax rates. However, it eliminates certain deductions. For example, it will eliminate deductions for state taxes, which will greatly affect people living in states with high taxes, such as New York and California.
It is expected that the tax plan will change the economy, perhaps for the better. Businesses, with the reduced corporate tax rate, will certainly benefit. This will hopefully improve the economy overall.
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.