President Trump vows to unveil the biggest tax cut and the largest tax reform in American history. The existing 7 tax brackets will be replaced by only 3 tax brackets. Also, standard deduction will double while many tax breaks for the wealthiest taxpayers will be eliminate. Business tax rate will be reduced to 15%. Here’s the detail of the 2017 tax reform for economic growth and American jobs, the biggest individual and Business tax cut in American history.
Goals For Tax Reform
- Grow the economy and create millions of jobs
- Simplify our burdensome tax code
- Provide tax relief to American families–especially middle-income families
- Lower the business tax rate from one of the highest in the world to one of the lowest
- Tax relief for American families, especially middle-income families:
- Reducing the 7 tax brackets to 3 tax brackets of 10%, 25% and 35%
- Doubling the standard deduction
- Providing tax relief for families with child and dependent care expenses
- Elimination targeted tax breaks that mainly benefit the wealthiest taxpayers
- Protect the home ownership and charitable gift tax deductions
- Repeal the Alternative Minimum Tax
- Repeal the death tax
- Repeal the 3.8% Obamacare tax that hits small business and investment income
- 15% business tax rate
- Territorial tax system to level the playing field for American companies
- One-time tax on trillions of dollars held overseas
- Eliminate tax breaks for special interests
- Throughout the month of May, the Trump Administration will hold listening sessions with stakeholders to receive their input and will continue working with the House and Senate to develop the details of a plan that provides massive tax relief, create jobs and makes America more competitive.
President Trump’s proposal for tax reform will reduce seven federal income tax brackets to three brackets: 10%, 25%, and 35%.
The standard deduction will be double so that more taxpayers will benefit by choosing the standard deduction for simplification. On the other hand, most of the itemized deductions will be eliminated except for mortgage interest and charitable contributions. Overall, taxpayers that already used the standard deduction will see a significant saving in taxes.
The new tax proposal gets rid of Alternative Minimum Tax. Those who required to pay the AMT will be a decrease in income taxes. This change would make the tax system simpler. The tax proposal also eliminates the estate tax so that there’s no tax when leaving property to heirs and offspring.
Lastly, the new tax proposal limits the long-term capital gains tax rate to 20%. Most taxpayers won’t be affect as the top-end tax rate for capital gain is already capped at 20% except for some special circumstances.