GOP tax document reveals plan for massive tax cuts, preserves key deductions
WASHINGTON - Republicans on Wednesday will propose slashing tax rates for the wealthy, middle class and businesses, while also preserving popular tax deductions that encourage buying homes and giving to charity, according to a nine-page document ...
WASHINGTON - Republicans on Wednesday will propose slashing tax rates for the wealthy, middle class and businesses, while also preserving popular tax deductions that encourage buying homes and giving to charity, according to a nine-page document obtained by The Washington Post.
But the document, titled "Unified Framework For Fixing Our Broken Tax Code," leaves many key questions unanswered. In it, the White House and Republican congressional leaders do not identify the numerous tax breaks that they say will be removed in order to offset some of the trillions of dollars in revenue lost by cutting tax rates.
The framework is being presented to Republicans and the public Wednesday as a starting point for negotiations on revamping the U.S. tax code. Congress must vote the changes into law, and Republican leaders are now tasked with resolving controversial questions to unite their party - and possibly some Democrats - behind tax legislation.
The tax framework would:
* roughly double the standard deduction to $24,000 for married families and $12,000 for individuals
* collapse the seven individual income-tax brackets to three, with rates of 12, 25, and 35 percent
* raises possibility of a higher tax rate for the wealthy, though this remains an open debate
* allow more people to qualify for the child tax credit
* creates a non-refundable credit of $500 for non-child dependents
* preserves mortgage and charitable deductions, but promises to gut many others
* proposes simplifying tax benefits for retirement, work, and higher education
* eliminate the estate tax and alternative-minimum tax
* cut corporate tax rate from 35 percent to 20 percent
* allow high-income businesses that pay through individual income tax code to pay 25 percent rate
* allow companies to expense investments in equipment and other capital for at least five years
* create new limits on interest expenses
* eliminate a domestic production deduction Republicans feel will no longer be necessary
* preserve research-and-development tax benefits
* the document does not mention eliminating carried interest tax benefits used by hedge fund managers
* allows multinational companies to exempt all dividends from foreign subsidiaries
* incentivizes companies to bring overseas assets back to the United States, though it doesn't say what tax rate it will impose on this shift.